Why Boring Is Good: Beware of Tech Hype

Fergus Hodgson, November 8, 2018

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Mike Larson is sounding the alarm over what he perceives to be a growing tech bubble. Exhibit A is Uber, the ride-sharing company worth billions that has been operating at a loss for almost a decade.

He criticizes the hype-driven media and lazy fund managers for a lack of healthy skepticism. A senior analyst with Weiss Ratings, he believes that, just like the dot-com bubble he lived through, easy credit has been fueling overvaluation of assets and tech startups.

Now that the Federal Reserve is raising interest rates, the easy-money environment will dry up and many firms won’t survive. Larson advocates going back to more “boring” stocks for protection against the eventual unwinding.

Once the funding environment changes, a lot of these peer-to-peer companies are going to fall by the wayside, says Mike Larson. (Flickr)

Recommended Links

• Visit Weiss Ratings’ website and follow it on Twitter and Facebook.
• Read “Understanding Why Uber Loses Money,” on Crunchbase.
• Read “More Tech Stock Bubble Ahead?” on Weiss Ratings.
• Read “What You Can Do amid All This Dot-Com Era Déjà Vu,” on Weiss Ratings.

If You Liked This Episode

• “The Great Debate: Michael Larson on Optimists versus Pessimists,” Gold Newsletter Podcast.
• “How to Spot a Bubble,” Gold Newsletter Podcast.
• “Fed Unwinding Means Imminent Recession,” Gold Newsletter Podcast.

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Fergus Hodgson is Gold Newsletter’s roving editor. Follow him on Twitter and Facebook.