Originally published March 20 2015
Billionaire investor warns that the app bubble is the new dot com bubble
by J. D. Heyes
(NaturalNews) Do you want a stock market bubble? Well, it appears there's an app for that.
Billionaire investor and owner of the NBA's Dallas Mavericks says he believes there is a tech bubble on the way that will be far worse for investors that the dot com bubble of 2000.
Mark Cuban, in a blog post cited by Market Watch, said that if investors "thought it was stupid to invest in public Internet web sites that had no chance of succeeding back then, it's worse today."
In his post, Cuban detailed the risks he sees facing the current wave of angel investors and crowd funders.
But, as Market Watch further reported, the serious investors - the adults in the room, if you will - aren't paying much attention to such dire predictions:
He's not alone in his fear-mongering. While retail investors are all-in, equity-wise, as are corporations, prophets of doom are counting the moments until the cards fall in the public markets, as well. The thing is, they've been counting them for years now. Check out the chart of the day for how long it's been since we've felt a serious pullback. Spoiler alert: almost three years.
Others, Market Watch noted, are actually anticipating some market loss. One of them is Doug Kass, president of Seabreeze Partners. He's been anticipating weakness for some time and he has put himself in a position to profit from it when it comes.
Private investors are getting 'crushed' "Mr. Market is beginning to launch into the giddy phase, in which rose-colored glasses have replaced the camera with a stick - GoPro, which is now out of favor - as the most preferred accoutrement," he wrote on his own blog. "Nevertheless, despite the enthusiasm and extraordinary price momentum, I anticipate that my next move will likely be to meaningfully increase my short exposure."
He further says he is remaining "bearish" on the markets.
But Cuban was firm in his prediction, noting on CNBC's "Shark Tank" that private investors in such tech-heavy properties like apps and others that fail are getting "crushed."
"Small individual investors are putting their money into apps with no chance of getting their money back," the Dallas Mavericks owner and "Shark Tank" investor told CNBC's "Closing Bell" program.
He also said he views the private tech bubble as being much more dangerous than the public Internet bust of 15 years ago. He says the angel investors and other contributors to apps make more risky plays than regular stock traders because their bets don't come with liquidity.
Cuban made his comments during a week when the NADAQ index hit 5,000 for the first time since 2000. He said he does not currently see a bubble in public companies.
"I don't believe there is at all," he said.
In his blog post cited by CNBC, Cuban said times now are different than they were during the dot com boom and bust.
'Student loans should not be forgiven' "Back then the companies the general public was investing in were public companies. They may have been horrible companies, but being public meant that investors had liquidity to sell their stocks," he wrote, adding on Closing Bell that today's apps are just like the web sites back in the dot com era.
"Back then, it was a website. Now, it's an app," he said.
Cuban has also been bearish on federal student loans, calling that a "crisis" and saying politicians, including President Obama, who want to forgive the $1 trillion in current student loans are wrong.
"Forgiving the debt is the worst thing you can do, because all it does is bail out the universities," Cuban said, according to Business Insider. Doing so would only encourage more students to take on more debt that the taxpayers would be liable for.
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