Afternoon Must-Read: Noah Smith: A Tech Bubble or Just a Mistake?

…just another day in the financial markets…. A bubble is… where everyone buys at prices they know are inflated because they think they can find… a greater fool out there somewhere. Today’s tech start-up investment frenzy has a very defined chain of resale…. Angels and the crowd funders… venture capitalists… early-stage funders sell when the venture either offer shares to the public or gets acquired…. Initial public offerings are a lot rarer than they used to be… acquired by large companies such as Google, Facebook, Amazon, Apple and Microsoft. So unlike in the 1990s, early-stage investors now know exactly who the most likely end-stage buyers are…. If early-stage investors plan on selling to a ‘greater fool,’ it must be because they think Facebook, Google and the rest are the fools…. Are the big companies making a big mistake?… There seems to be a pretty obvious reason for big tech companies to be paying top dollar for little tech companies: insurance…. All of these companies have to be looking for the next platform with a strong network effect that will draw the eyeballs of the fickle, tech-addicted…. The current situation looks very little like the dot-com bubble of the late ’90s.