Tech bubble? No, no way, nope, says Silicon Valley investor
Thiel claims tech firms actually the bubble safety net
Web Summit Top tech investor and entrepreneur Peter Thiel has said there’s no bubble in tech, despite the billion-dollar valuations floating around for firms that haven’t seen a penny in profits.
“I don’t really think that there’s a bubble ... Bubbles only happen when the public is involved, they’re a psychosocial event,” Thiel told the press at Web Summit 2014.
He claimed to be so invested in Silicon Valley firms because they were as far away from the "real bubble" as it's possible to get.
“We’ve had this history of bubbles, so it’s a logical question to ask — where the bubble is today?” he said. “My candidate for the bubble today would be the super low interest rates, even negative rates, [so] the bubble is, in effect, government bonds."
“If there was one thing you want to stay away from, it's bonds, and equities that behave like bonds," he said.
“The Silicon Valley companies don’t have dividends or cash-flows, but they have lots of growth so the metrics for analysing them are radically different," he added.
The press was naturally curious about where Thiel estimates the next big thing is (maybe some of them are harbouring some start-up ideas of their own they’d like to see the moneyed investor get excited about) but he said while it was tough to know where the gaps were for new companies, it was easy to see which areas were oversubscribed.
“I always think it’s hard to answer these questions in the abstract. Part of it is what fields are the entrepreneurs passionate about, what do they know about. [But] when you hear the words cloud computing and big data, you should think fraud — these are incredibly over-hyped buzzwords,” he said.
And if pushed to mention an area he’d be interested in, it would be biotech. Thiel is known to be keen on fighting death, having often said he wanted to find the cure to humanity’s inescapable fate.
He said old age and death were often overlooked areas of research because of our attitude towards our inevitable demise.
“I think this question of ageing and death is one where there are very deep psychological blind spots. We accept it and then we’re in denial,” he said. “What we need is more fighting, less denial, and less acceptance.” ®