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End of the world - April 2000

I was chatting with an old college buddy over lunch today. I mentioned to him that the IT world ended  (well, sort of) in spring 2000 when the Internet bubble went bust.

And now - too many companies, graduates chasing too few dollars, contracts. And I mentioned, imagining myself to be Alan Greenspan, that it may be like this for the next couple of years - give or take a couple of years ;)

And college buddy, who did a PhD in Biotechnology, mentioned that he felt that the BioTech field is going through a bubble at the moment. Except with BioTech the cycles are longer - i.e. there is no chance of being set up in week one and going public in week three.

College buddy felt that there are far too many people entering the PhD streams in BioTech and investors have staked huge amounts in too many BioTech firms.

College buddy said that the same that happen to IT is going to happen to BioTech - although the ripple effect will be less as there is a higher threshold of entry to BioTech.

Assuming College bud is correct, why do we fall into this traps? I remember at my alma mater they expanded IT spaces by 150% at the height of the Internet bubble. A friend started a PhD (CS) waiting for the economic malaise to pass over - he said many, after graduation, joined CS graduate schools to shelter from the storm.

Ram Dass
Monday, September 22, 2003

It is my opinion that CS graduate schools will only make the IT problem worse. Very few companies hire a Ph.D for non-research work, and Ph.D's were in fairly short demand in the first place (even during the bubble).

I think that unless one plans on doing research, CS is best as a minor, with the actual degree going towards a major that reflects the domain that one wishes to program (i.e. business/accounting/economics for business programming, math/chemistry/biology/physics for scientific programming, etc)

Wayne Earl
Monday, September 22, 2003

Are there a shortage of PhDs in Computer Science and Engineering?

Most that I know off are teaching. But do not know if there is a surplus of PhD graduates in these fields.

Monday, September 22, 2003

1870's - Gold
Mid 1980's - Electrical Engineering
Early 1990's - Law
Mid 1990's - Medicine
00's - Dotcoms

I'm sure there are periods for accounting, architecture, civil engineering (1970's?), and so on. The human animal is easy prey for the gold rush mentality ("Go there, get rich, retire"), and you'll see it happen over and over and over again.


Monday, September 22, 2003

Strange I just sold my IBB (Nasdaq Biotech Index Fund) today.  My feeling is the market is in a bubble.  There was story on NPR today about Indian biotech companies entering Africa, and U.S. companies working to keep them out.  The producer's feeling was the U.S. companies didn't want the Indian companies gaining a foothold in any region, including Africa, for fear of future competition.

christopher baus
Monday, September 22, 2003

"Assuming College bud is correct, why do we fall into this traps?"

Adam Smith's "Invisible Hand" hard at work. 

You see the same thing in physical systems where a rapid ramp causes overshoot and subsequent oscillations.  In mechanics (electronics, whatever) the usual solution is to put in place something to damp things down more quickly like a capacitor or a shock absorber/dashpot.  Don't know what the analog would be for a human system.

Monday, September 22, 2003

"Don't know what the analog would be for a human system."

anon: socialism.  *grin*

Bitchslapped by the Invisible Hand
Monday, September 22, 2003

It's called greed. Look how many people with PhDs in math and physics are working on wall street.

Tom Vu
Monday, September 22, 2003

The best book I ever read on this was Extraordinary Popular Delusions and the Madness of Crowds.  People have always been this way.  Our technology evolves but our brains don't.

Barry Sperling
Monday, September 22, 2003

... or maybe our brains works too well: Every speculator expects to get out before the bubble bursts, and make beaucoup bucks :-) Capitalism at its very finest.

Frederic Faure
Tuesday, September 23, 2003

It's the dirty secret of capitalism. Here is how to become rich:

1) Adopt a new position.
2) Convince other people that the new position is the "next great thing".
3) Sell the position to other people you've convinced.
4) Get out early.

Basically, is a transfer of wealth from late adopters to earlier adopters. Typically, there are many more late adopters than earlier adopters (thus the wealth gets concentrated in fewer hands).

The big difficulty is figuring out a sellable position. Another difficulty is realizing when to get out.

Tuesday, September 23, 2003

I've just got hold of "Extraordinary Popular Delusions and the Madness of Crowds." The interesting thing is that it was written in 1841, but if you skipped the title page you would think it was written yesterday.

Stephen Jones
Tuesday, September 23, 2003

I've been looking for "Extraordinary Popular Delusions ..." on and off ever since Chuck Shwab recommended it in two of his books - one time without naming it, and another time he did name it. I guess it's back in print.

I'm sure half of the "mania" anecodes I read - all repeated in various forms in different books - are from this book. Probably used to support wildly varying conclusions that are at odds with each other.

Back on topic, is (off shoring|open source|.net|microsoft|linux|programming|project management|Philo) a mania?

(kidding, sorry Philo if I said 'Joel on Software' this post would've been deleted)

Mark T A W .com
Tuesday, September 23, 2003

dotcom was a bubble, b/c for every 1 good idea, 100 bad ones were financed, with no real hope of a future, only the short term hopes of being bought out, or sold for stock (IPO). 

How is the biotech sector like a bubble?  Just b/c it's getting a lot of funding, doesn't construe a bubble.  What are the "belly flop" ideas that are getting funding?  (Like funding a "dotcom bugtracker" after there are already 500 of them in existance  ;-)))

Thursday, September 25, 2003

the main problem with Biotech is the transition from a lab environment to an engineering one. Nothing like as easy as it appears.

There is really no reason to depart too far from the old price to earnings yardstick. it became abundantly clear in the boom that people were paying silly amounts of money for stocks that could never deliver (remember in the UK when Dixon's (including PCWorld) had a negative stock value because its total shareholding was worth less than the value of the Freeserve shares it owned?).

One of the main problems of the era, was  that pension fund managers are obliged to keep a large amount of shares in top rated FTSE companies, so if a balloon company goes to the top they have to keep pumping air in by buying more and jettisoning perfectly solid earnings to pay for the investment. That has not changed. And nor has the pressure on fund managers to deliver good quarterly results - so that disastrous short-termists are rewarded, and circumspect finanicial managers are sacked.

Stephen Jones
Wednesday, October 1, 2003

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