more on Signs of a bubble?

[David Farber <dave () farber net>]

Begin forwarded message:

From: Kevin Marks <kevinmarks () mac com>
Date: December 8, 2005 5:03:26 AM EST
To: dave () farber net
Subject: Re: [IP] Signs of a bubble?


On Dec 7, 2005, at 6:43 AM, David Farber wrote:

> From: Tristan Louis <tristan () tnl net>
>
> As we near the end of the year, I realized that it's been about half a
> decade since the bubble burst on the dotcom world. At the same  
> time, it
> seems that a number of similar bubble signs may be showing up again.

I responded to Tristan here:

http://epeus.blogspot.com/ 
2005_12_01_epeus_archive.html#113394502353153827

The one that I look for, which I derived from reading Michael Lewis's  
Liar's Poker, and from my experiences in the CD-ROM publishing  
business in the mid 90's is this simple rule:

When expensively educated, fashionable young graduates start showing  
up in your field, you're in a bubble.

Lewis describes this in the investment banking business, when his  
entire Yale graduating class applied to become investment bankers.

The trouble with this indicator is that if you aren't looking for it  
it seem like the natural order of things - of course having  
personable young things hanging on your every word is to be expected  
- finally you're getting the recognition you deserve!

In practice, however, the finely-tuned herd instincts that get  
selected for in the Ivy League or the posher UK universities make  
them flock to the latest bubble.



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