"It certainly feels like 1999 in San Francisco..."

Comments

1
I thought this was really interesting. In the past year I know of at least 8 or 9 folks who worked at Microsoft or Amazon who sold their places here in Seattle and moved to the bay area for new opportunities.

Hope they don't get burned in a bubble bust. Well, one of them I kinda hope does but that's another story.

2
The Tech Bubble then was a lot of companies spending a lot of VC money without actually making much profit (in the vast majority of cases actually loosing money). The Bay Area now is filled with companies making profit hand over fist. So, it's not the same at all.
3
I'd be more worried about whether Microsoft will survive here. Even if you dislike the company, you can't deny how bad it would be for Seattle's economy if it were to shut down.

XBox is doing dandy, but I get an uneasy feeling the rest of Microsoft is ready for a mass deflation within the next decade. Hopefully someone can put my mind at ease.
4
@mackro

They made more revenue last quarter than ever before.
5
I've been suspecting a bubble for a couple of years now. It's only getting worse.

@2 Some companies are making profit hand over fist. Most of the startups are more like what Paul saw earlier today -- smoke and mirrors, burning through VC/investor capital like it's water.
6
@Cow

As long as Google is making $4 billion in profit a quarter and Apple is making $9 billion in profit a quarter, there's enough money in the bay area to support a lot of failed start ups. In the 1990's, no one was actually making profit.

When Google and Apple stop making money, I'll be worried.
7
Shorter @2 and @6: "Let me explain to you why this bubble is different from all previous bubbles and is therefore impervious to sharp objects."

Such justifications are always the surest sign of a bubble about to burst.
8
Bubbles always burst and it's never pretty. 2000 and 2008 should have taught us that by now. But I see that many are living in the clouds with their heads up their asses.
9
Bubbles are quite common.

Main advice is, don't sink all your money in housing in bubble regions, as it can drop like a stone quite quickly, and do max out your Roth IRA (if young, or make too much), IRA, and 401k/403b plans and stick those in broad mutual funds (like VINIX). Any vesting options are fine, but you can always suffer like Zynga and Facebook IPO suckers did.

If you do buy expensive housing, get a vacation home. Less likely to plummet in value, and you can move there when the bubble bursts.
10
How on earth are they doing deals in Blue Bottle? Everytime I've tried to go there the line to get in is two hours long.
11
@10, I can only imagine they chose it because they knew they'd need three hours to close the deal - two in discuss in line, a half hour to wait for the vacuum thingy to have their coffee ready, a half hour to sip and sign.
12
Everyone at my job laughed at me for shorting low 5 figures worth of Groupon, Linkedin, and Facebook all on IPO day.

Facebook's shitty stock performance bought me a $4000 Macbook.
13
@10: I've never seen the Ferry Building one less than mobbed, but I've been able to get seats at the one behind the Old Mint pretty reliably in the mid-weekday.

Plus, they keep expanding. Each new location lessens the appeal of the others as destination coffee.
15
@12 How did you short Facebook on IPO day? Where did you borrow the shares? Pants on fire.
16
@arbeck Well that worry is extinguished then.
17
Is there a bubble in the sense of 1999? Not hardly, or at least not yet: VCs want to see a path to profitability, nobody's hiring liberal arts grads to be sysadmins or developers, and stupid deals like InstaGram and Yammer are so far the exception rather than the rule. If anything, the hiring situation is pretty inverted: if you're an industry veteran you can write your own ticket, but nobody anywhere is willing to take a chance on people trying to come in from other walks of life.

The technology biz has always been cyclical: just ask the corpses of Atari, Commodore, DEC and Data General. Just because we're on another one of the regular upswings doesn't mean that it's a 'bubble' in the economy-eating sense of the dot com insanity.

A lot of the bubble-y feeling around SF really has to do with the insane rents here, and that's far more a consequence of several decades of anti-landlord, anti-development and pro-NIMBY policies here. Housing construction is at its lowest level in decades: less than 500 new units were brought online in the last year, in a year when something like 50,000 people moved to the city. Mix in rent control and et voila: the average rent price for an available unit has basically doubled over the last 24 months.
18
@13, the Old Mint one is the one I have tried three times, unsuccessfully, to get in. I've still never been to a Blue Bottle in any of my trips there.

I rather enjoyed going to Ritual Coffee on Valencia; not only was the coffee good, but the hilarity of the room full of people one to a table, all facing the same way, all with giant headphones, all staring raptly into laptop screens without moving a muscle for the entire 90 minutes we were there -- it was more like a photograph of a classroom than a public space. I mentioned the coffee was good, didn't I?
19
@12, a $4000 Macbook? The Macbook was discontinued in 2011. The most recent Macbook Pro with a 13" screen will cost you around $2400 (fully loaded with 512GB Solid State Drive $900).

Maybe you got the 15" MBP.
20
See Madelbrot on Bubbles. Circa 2004. Let's just say they are more than common in markets.

http://users.math.yale.edu/mandelbrot/we…
21
@19 - It's funny you noticed that, since Ritual actually covered their outlets to avoid such scenes (unless this was a few years ago). If you're back in area, head down the street a few blocks and try Four Barrel. It's a slightly more, er... interactive crowd, and better coffee (not to say Ritual isn't good, it is.).
22
@18: Ritual is delicious, but the hipster attitude wafting off the baristas at that Valencia shop was suffocating, even by Mission standards.

I think it was the Central District's Tougo Coffee that first turned me on to Ritual. Wish they (or anyone else in Seattle) carried it more often!
23
@18: the Valencia St. Ritual is just an ongoing social disaster. Walk north a few blocks to Four Barrel for an equally good cup with 100% less ambient attitude.
24
@10, 11

They use iamexec.com and pay someone to stand in line for them.
25
@24, good lord.

@21, really? This was, mmm, February? I could have sworn I was in Ritual. Maybe everybody's on battery power.

OK, SF geniuses, where should I be getting my coffee in the Haight/Cole Valley/Inner Sunset?
26
What the fuck is SoMa?
27
@25 -Perhaps it was an idol threat, or they caved. I haven't been in there in a while. Also, I suppose Macbooks do have pretty impressive battery life these days.

Haight/Cole Valley/Inner Sunset coffee? That's actually a great question. There's plenty of drinkable coffee I'm sure, but I don't think any of those neighborhoods have a spot anyone would go out of their way for.

@26 South of Market.
28
@25: sorry, a little out of my regular orbits. but if you're in cole valley you need to be getting your sushi at Hama-Ko.

@26: SoMa == South of Market, a formerly semi-industrial neighborhood that's now a mix of new condos, converted office space, nightclubs and skid row.
29
What the fuck is SoMa?

It's a phrase that immediately precedes a teenager's "can I have twenty bucks?"
30
@4: Last quarter MSFT reported the first loss in company history after writing off the Aquantive debacle.

I'd like to say that MSFT's entrenchment in the corporate world means they'll be going strong for a long time to come, but I just can't be optimistic about a company that fundamentally doesn't get the web.
31
@30 and for what it's worth, SoMa was also SF's gay club epicenter from the the 60's until half the place burnt down (among other reasons) in the 80's. Not my area of expertise, but I think there's still a decent number of old-school gay bars down there.
32
Also, I don't know why I directed that at you #30. Please ignore.
33
@31 yeah, there's still a bunch of them there, but the lights are slowly winking out. It's kinda sad, but I get the feeling SF's older gay population is simply aging out of the bar scene, and the younger ones don't have any particular loyalty to the old greybeard hangouts.

(Well, that and the fact that there's still nonstop harassment of gay establishments by the SFPD and the CA Alcoholic Beverages Commission, sigh.)
34
You can't hold back the 21st century.

Much as you try.
35
What @15 said. WillInSeattle has made the same lie. Ain't no shares available from your broker to short until 3 days after IPO.
36
@35 wellllllllll.... if "you" happen to be a hedge fund trader, placing a short position via shares you do not actually hold turns out to be depressingly possible. But yeah, no way in hell are bottom-feeders like WiS or Swearengen getting to play the naked-short game.
37
@28: Lost cause and pedantic as heck but this paper is in Seattle.

It's "Skid Road".
38
Next time you "correct" someone, David, you might want to make extra effort to be sure you're right first. "Skid row" it is.
39
@37: the original "Skid Road" may have been in Vancouver, but "Skid Row" has been common usage for getting on a century now. There's pedantry and then there's hyper-prescriptive idiocy: guess which side of the line you just jumped onto with both feet?