Tech bubble: This is ‘money in your mattress’ time
Funding for tech start-ups appears to be going strong, but there's a looming concern that it could be too strong — strong enough that it's already fueled the next tech bubble.
Some investors and analysts have been reluctant to say outright that we're in the midst of overgrowth in tech.
Fifteen years ago, the sector was relatively young, but now with established tech companies like Apple, Microsoft and Facebook leading the charge and better tech representation among the S&P 500, the industry has matured, according to Angelo Zino, analyst at S&P Capital IQ, in a phone interview.
But relatively firm-footed tech giants are one thing. Start-ups are an entirely different world. The market for tech start-ups today may be just as speculative as it was during the first bubble, suggested Nick Bilton, technology and business columnist at The New York Times.
"The valuations of companies are just completely out of whack and no one has any idea where these numbers are coming from," Bilton said in an interview with CNBC, adding that the existence of billion-dollar start-up "unicorns" in tech, is a major sign that we're in a tech bubble.
Among those unicorns is ride-hailing company Uber, worth $51 billion; electronics company Xiaomi, worth $46 billion; and short-term apartment rental site Airbnb, worth $25.5 billion, according to a recent Fortune ranking.
Petrovich9 | Getty Images
Bilton points to the skyscraper index as further evidence of a new tech bubble.
"At the beginning of every bubble burst or every recession, there's always been a race to build the biggest skyscrapers in the world. And it's usually from money that has come in from bubble-gotten gains," he said. "Often when you have these buildings built, there isn't anyone to fill them and it starts to be one of the things that causes the bubble to burst," Bilton posited.
The skyscraper indicating a bubble this time around, according to Bilton, is the Salesforce Tower, which is currently under construction. That skyscraper is expected to stand 200 feet higher than the Transamerica Pyramid, which is currently the tallest building on the San Francisco skyline.
But whether there's a bubble at risk of bursting or just some high-flying start-ups that need to gear up for a descent, Bilton seems conservative.
"My best advice to protect yourself is put your money in your mattress," Bilton said.
All industries should brace for a shakeup: Benioff
But risk is par for the course at VC firms.
"Most venture capitalists … are absolutely comfortable with tech companies needing time to reach profitability," said Tony Tjan, CEO and managing partner at venture capital firm Cue Ball Capital, in an email.
"What you are looking for first and foremost is great people. Human capital matters more than anything in good and bad markets," Tjan said.
http://www.cnbc.com/2015/10/09/tech-bubble-this-is-money-in-your-mattress-time.htmlSolar activity predicted to fall 60% in 2030s, to 'mini ice age' levels: Sun driven by double dynamo
- Date:
- July 9, 2015
- Source:
- Royal Astronomical Society (RAS)
- Summary:
- A new model of the Sun's solar cycle is producing unprecedentedly accurate predictions of irregularities within the Sun's 11-year heartbeat. The model draws on dynamo effects in two layers of the Sun, one close to the surface and one deep within its convection zone. Predictions from the model suggest that solar activity will fall by 60 per cent during the 2030s to conditions last seen during the 'mini ice age' that began in 1645.
FULL STORY
Montage of images of solar activity between August 1991 and September 2001.
Credit: Yohkoh/ISAS/Lockheed-Martin/NAOJ/U. Tokyo/NASA
A new model of the Sun's solar cycle is producing unprecedentedly accurate predictions of irregularities within the Sun's 11-year heartbeat. The model draws on dynamo effects in two layers of the Sun, one close to the surface and one deep within its convection zone. Predictions from the model suggest that solar activity will fall by 60 per cent during the 2030s to conditions last seen during the 'mini ice age' that began in 1645.
Results will be presented today by Prof Valentina Zharkova at the National Astronomy Meeting in Llandudno.
It is 172 years since a scientist first spotted that the Sun's activity varies over a cycle lasting around 10 to 12 years. But every cycle is a little different and none of the models of causes to date have fully explained fluctuations. Many solar physicists have put the cause of the solar cycle down to a dynamo caused by convecting fluid deep within the Sun. Now, Zharkova and her colleagues have found that adding a second dynamo, close to the surface, completes the picture with surprising accuracy.
"We found magnetic wave components appearing in pairs, originating in two different layers in the Sun's interior. They both have a frequency of approximately 11 years, although this frequency is slightly different, and they are offset in time. Over the cycle, the waves fluctuate between the northern and southern hemispheres of the Sun. Combining both waves together and comparing to real data for the current solar cycle, we found that our predictions showed an accuracy of 97%," said Zharkova.
Zharkova and her colleagues derived their model using a technique called 'principal component analysis' of the magnetic field observations from the Wilcox Solar Observatory in California. They examined three solar cycles-worth of magnetic field activity, covering the period from 1976-2008. In addition, they compared their predictions to average sunspot numbers, another strong marker of solar activity. All the predictions and observations were closely matched.
Looking ahead to the next solar cycles, the model predicts that the pair of waves become increasingly offset during Cycle 25, which peaks in 2022. During Cycle 26, which covers the decade from 2030-2040, the two waves will become exactly out of synch and this will cause a significant reduction in solar activity.
"In cycle 26, the two waves exactly mirror each other -- peaking at the same time but in opposite hemispheres of the Sun. Their interaction will be disruptive, or they will nearly cancel each other. We predict that this will lead to the properties of a 'Maunder minimum'," said Zharkova. "Effectively, when the waves are approximately in phase, they can show strong interaction, or resonance, and we have strong solar activity. When they are out of phase, we have solar minimums. When there is full phase separation, we have the conditions last seen during the Maunder minimum, 370 years ago."
http://www.sciencedaily.com/releases/2015/07/150709092955.htm
It is 172 years since a scientist first spotted that the Sun's activity varies over a cycle lasting around 10 to 12 years. But every cycle is a little different and none of the models of causes to date have fully explained fluctuations. Many solar physicists have put the cause of the solar cycle down to a dynamo caused by convecting fluid deep within the Sun. Now, Zharkova and her colleagues have found that adding a second dynamo, close to the surface, completes the picture with surprising accuracy.
"We found magnetic wave components appearing in pairs, originating in two different layers in the Sun's interior. They both have a frequency of approximately 11 years, although this frequency is slightly different, and they are offset in time. Over the cycle, the waves fluctuate between the northern and southern hemispheres of the Sun. Combining both waves together and comparing to real data for the current solar cycle, we found that our predictions showed an accuracy of 97%," said Zharkova.
Zharkova and her colleagues derived their model using a technique called 'principal component analysis' of the magnetic field observations from the Wilcox Solar Observatory in California. They examined three solar cycles-worth of magnetic field activity, covering the period from 1976-2008. In addition, they compared their predictions to average sunspot numbers, another strong marker of solar activity. All the predictions and observations were closely matched.
Looking ahead to the next solar cycles, the model predicts that the pair of waves become increasingly offset during Cycle 25, which peaks in 2022. During Cycle 26, which covers the decade from 2030-2040, the two waves will become exactly out of synch and this will cause a significant reduction in solar activity.
"In cycle 26, the two waves exactly mirror each other -- peaking at the same time but in opposite hemispheres of the Sun. Their interaction will be disruptive, or they will nearly cancel each other. We predict that this will lead to the properties of a 'Maunder minimum'," said Zharkova. "Effectively, when the waves are approximately in phase, they can show strong interaction, or resonance, and we have strong solar activity. When they are out of phase, we have solar minimums. When there is full phase separation, we have the conditions last seen during the Maunder minimum, 370 years ago."
http://www.sciencedaily.com/releases/2015/07/150709092955.htm
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