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> next year as the downturn ends and the upswing begins Who says the downturn ends next year? VCs act like it's all 2008: someone will come and bail them out.

by code51 4y ago

> next year as the downturn ends and the upswing begins Who says the downturn ends next year? VCs act like it's all 2008: someone will come and bail them out. Yet, we are literally one Powerpoint away from a multi-year dumpster fire.

rco8786 4y ago
> Who says the downturn ends next year? That's just the premise of the article base on a historical observation that recessions last around 15 months...this was explained clearly. If your personal outlook is that we're walking into a multi-year dumpster fire then the advice in the article should be adjusted accordingly.
dijit 4y ago
To be perfectly fair; when it comes to the economy, belief somehow follows reality. If “the economy” believes there will be a recession, there almost certainly will be one. Even if it wasn’t going to happen by itself. VCs dumping money into the “bottom point” of the market will also stimulate the economy a lot, leading to a recovery.
- blitzar 4y ago
  > If “the economy” believes there will be a recession, there almost certainly will be one. Even if it wasn’t going to happen by itself. There have been beliefs there will be a recession from the end of the 2008 recession to date. There has been beliefs that things are great and there will never ever ever be a recession ever again. People who believe a recession is coming are like broken clocks, many of whom have prediced 45 out of the last 3 recessions.
  - rco8786 4y ago
    In a world of billions of individuals you can always find some that believes in whatever it is you're looking for people to believe. OP's point as I read it is that once those beliefs hit a critical mass amongst the general population they tend to come true via self fulfilling prophecy. Correlation/causation aside - the point is not "if my uncle thinks a recession is coming, there is", it's "if 100mm American adults think a recession is coming, there is"
shubb 4y ago
The other thing going on is... the system is such that they have to spend the money on something, sooner rather than later. These VC funds made a lot of money last year, and if they can't make up a reason to re-invest it they have to return it to the next layer up, who face the same decision. They are probably getting paid on assets under management, so their incentive is to support current valuations by swapping funding rounds at good valuations with other funds, and generally putting the money away before things get any worse.

by code51 4y ago

rco8786 4y ago

> Who says the downturn ends next year? That's just the premise of the article base on a historical observation that recessions last around 15 months...this was explained clearly. If your personal outlook is that we're walking into a multi-year dumpster fire then the advice in the article should be adjusted accordingly.

dijit 4y ago

To be perfectly fair; when it comes to the economy, belief somehow follows reality. If “the economy” believes there will be a recession, there almost certainly will be one. Even if it wasn’t going to happen by itself. VCs dumping money into the “bottom point” of the market will also stimulate the economy a lot, leading to a recovery.

blitzar 4y ago
> If “the economy” believes there will be a recession, there almost certainly will be one. Even if it wasn’t going to happen by itself. There have been beliefs there will be a recession from the end of the 2008 recession to date. There has been beliefs that things are great and there will never ever ever be a recession ever again. People who believe a recession is coming are like broken clocks, many of whom have prediced 45 out of the last 3 recessions.
- rco8786 4y ago
  In a world of billions of individuals you can always find some that believes in whatever it is you're looking for people to believe. OP's point as I read it is that once those beliefs hit a critical mass amongst the general population they tend to come true via self fulfilling prophecy. Correlation/causation aside - the point is not "if my uncle thinks a recession is coming, there is", it's "if 100mm American adults think a recession is coming, there is"

shubb 4y ago

The other thing going on is... the system is such that they have to spend the money on something, sooner rather than later. These VC funds made a lot of money last year, and if they can't make up a reason to re-invest it they have to return it to the next layer up, who face the same decision. They are probably getting paid on assets under management, so their incentive is to support current valuations by swapping funding rounds at good valuations with other funds, and generally putting the money away before things get any worse.