Justin Fox, Columnist

Unicorns Are a Sign of the Right Kind of Bubble

Startup survivors will change the economy as we know it.

November 10, 2015 at 4:08 PM UTC

Justin Fox is a Bloomberg Opinion columnist covering business, economics and other topics involving charts. A former editorial director of the Harvard Business Review, he is author of “The Myth of the Rational Market.”

And when unicorns fly...
Photographer: Karl-Josef Hildenbrand/AFP/Getty Images

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Let’s not talk about a bubble. It’s a loaded word, and people can’t agree on what it means. Let’s talk instead about classes of securities that cruise along at high and rising prices for years, then lose much of that value for no obvious exogenous reason. (OK, “bubble” does have the advantage of being pithy.)

Such episodes have been occurring for about as long as there have been financial markets. What they all have in common, I think, is that there’s something new and different about the securities in question. Investors haven’t experienced them before, so it’s possible to believe that this time is different.