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Ask HN: Are we in tech-stock bubble?

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Re: Ask HN: Are we in tech-stock bubble?

#61

Post by throw_this_one »

hn_throwaway_99 wrote: post #37

Another commenter mentioned this, but it's important to understand the net present value calculation, which is: NPV = Rt / (1 + i)^t Rt is the incoming cash flow at time t, and i is the discount rate. This is the "theoretical" way that businesses should be valued: estimate their future cash flows, then discount them back to the present to take the time value of money into account (of course, in the real world, there…

What's the real ELI5 reason for this though? Why does a drop in the fed rates from 1% to .2% matter much more than a drop from 4% to 2%?

Re: Ask HN: Are we in tech-stock bubble?

#62

Post by throw_this_one »

bfieidhbrjr wrote: post #49
rootusrootus wrote: post #45

Earlier quoted context omitted.

> They are horse carriage companies in the age of the Ford Model T. I disagree. If you discount self-driving (and I do), then there are clearly other manufacturers who know perfectly well how to produce an EV. I own both a Tesla and a Bolt, and neither is a clear winner over the other. They each have ups & downs, but in any case GM produced a perfectly good EV. And Ford's Mach-E appears to be an improvement on Tesla'…

I've owned multiple Tesla and LEAFs. I've test driven a Bolt. A Bolt to a Tesla like Salieri to Mozart. Where to even begin? Thin seats. Smaller car. No charging network. No self-driving. No remote software updates... It's a long list. Does GM even know how to make a car these days? TSLA has massive growth problems. I've had my own issues with my Tesla cars. But how could we even talk about Bolt and Tesla in the same…

Visual/interior specifics, smaller - they will adjust to what the market wants Charging network - not hard, will be there soon Self-driving - more of a "cool" feature, will be industry standard in a decade anyway Remote software updates - trivial to implement, will be standard

TSLA has nothing unique besides brand and battery tech. Battery tech is definitely going to be ubiquitous in a decade. They're already nearing an ideal range and charge time for average usecase.

Like I said, self driving is like a nerdy "cool feature". Nobody is gonna do something on their computer or take a nap or something.

Re: Ask HN: Are we in tech-stock bubble?

#63

Post by powvans »

vbtemp wrote: post #24
seibelj wrote: post #13

Earlier quoted context omitted.

Just find things the government can’t print more of, are desirable to a broad portion of the population, and are resistant to rapid increases in supply in response to demand. Gold, silver, bitcoin, land in desirable places. I also have the normal index funds and certain hand-picked stocks. One issue with stocks is companies can offer more of them in response to demand, unlike land or bitcoin. We are in a period of ra…

> We are in a period of rapid inflation but mainstream economists and the government pretend we aren’t. It has been going on for decades but the official inflation rate is supposedly sub-2% while healthcare, education, daycare, high-quality food, housing, and all manner of highly-desirable-yet-cannot-be-easily-created assets have gone way up in price and are unreachable to even the middle class let alone the poor. Ca…

I agree with you and would add that cheap imported crap seems to be getting cheaper and crappier. It's pretty astounding just how cheap and crappy things can get and still be salable products.

Re: Ask HN: Are we in tech-stock bubble?

#64

Post by throw_this_one »

CyanLite4 wrote: post #43
cwwc wrote: post #4

TSLA? Not justifiable from a pure numbers standpoint. But - other tech stocks? Arguably justifiable. Since the risk free rate (treasuries) has cratered, this has altered the DCF calculation that analysts use to value a company (the outcome is essentially this: the company is worth more, because this risk free rate is used in discounting the PV vs FV of the company’s cash flows). Thus, it makes sense to have companies…

TSLA is easily justifiable. Their entry into other markets, like home-installed batteries (PowerWall), solar roofs, HVAC, home automation, trucking, robo-taxis, etc. all make it very attractive. Even just selling their batteries at retail stores like an Energizer or Duracell would add a few billion to their revenue stream. They’re a solid 5 years ahead of competitors in terms of battery and self-driving capabilities.…

How is self-driving software that useful at all for a consumer driving a car?

Nobody is gonna trust the car to drive while they're napping or working on their laptop lol.

Re: Ask HN: Are we in tech-stock bubble?

#65

Post by throw_this_one »

maxharris wrote: post #14

TSLA? Entirely justified. I think we're headed to $4400/share by 2024. (See Cathie Wood's "golden goose" bull case for details.) I laid out my reasoning for getting in back in May 2020. I raised my position to 86% a month after writing this: https://news.ycombinator.com/item?id=22970810

How is any lead that TSLA has in battery tech or software not going to be industry standard in 5-10 years? Other companies will hire their engineers etc.

Only advantage they have is branding. Which is good, but companies like BMW have the premium brand down good too.

Re: Ask HN: Are we in tech-stock bubble?

#66

Post by cyb_ »

I came across an article recently which talked about how current accounting standards don't portray an accurate picture of many tech companies due to "intangible assets". I wonder if or how much this shows up in the current feeling of many tech stocks bring overpriced?

https://tanay.substack.com/p/the-rise-of-intangibles-and-the... https://news.ycombinator.com/item?id=25556726

Re: Ask HN: Are we in tech-stock bubble?

#67

Post by ajmadesc »

throw_this_one wrote: post #61
hn_throwaway_99 wrote: post #37

Another commenter mentioned this, but it's important to understand the net present value calculation, which is: NPV = Rt / (1 + i)^t Rt is the incoming cash flow at time t, and i is the discount rate. This is the "theoretical" way that businesses should be valued: estimate their future cash flows, then discount them back to the present to take the time value of money into account (of course, in the real world, there…

What's the real ELI5 reason for this though? Why does a drop in the fed rates from 1% to .2% matter much more than a drop from 4% to 2%?

Exponent?

Re: Ask HN: Are we in tech-stock bubble?

#68

Post by mancerayder »

hanoz wrote: post #50
mancerayder wrote: post #25

No one ever answers a question like that to a satisfying degree. I made a bunch of money speculating on the swings of stocks. Not with options, just patience, and it enabled me to make wild returns. For example, I bought and sold Virgin Galactic 3 times over the past 13 or 14 months, which tripled my initial capital. I did similar but with a risky few pharma stocks. PLTR tripled since IPO (and unlike AirBNB it wasn't…

> For example, I bought and sold Virgin Galactic 3 times over the past 13 or 14 months, which tripled my initial capital You would have more than tripled your capital if you'd bought 14 months ago and held until today.

That's patently incorrect, actually. Today the stock is 24.39. On 30/10/2019 I purchased a quantity at $12.40.

Let's continue. I sold it all in 2/2020 in 3 separate transactions between $32-$37. Later, I repurchased it at $22, and again two more times as it dropped to the 18's. I then sold everything again at $28... about 10 days ago.

So it was two sets of purchases and sales, not three.

So no, buying and holding would have not maximized my gains. And this is true for many stocks.

By the way, this is in an IRA account so there is no need to think about short v. long-term cap gain taxes here. The behavior in my main brokerage accounts accounts a bit more for the potential tax implications. However, if it's a volatile stock and I think went up or down in an extreme way that I think isn't justified, I'll jump in.

Re: Ask HN: Are we in tech-stock bubble?

#69

Post by randomopining »

ajmadesc wrote: post #67
throw_this_one wrote: post #61

Earlier quoted context omitted.

What's the real ELI5 reason for this though? Why does a drop in the fed rates from 1% to .2% matter much more than a drop from 4% to 2%?

Exponent?

Yeah but besides the math part of it... what’s the actual explanation? Besides “that’s how it impacts the formula!”

Re: Ask HN: Are we in tech-stock bubble?

#70

Post by ac29 »

jungturk wrote: post #40
tonystubblebine wrote: post #2

TSLA? No idea. But I think there's often some hidden game going on with tech companies that go well beyond selling more sugar water and expanding overseas to places that haven't seen sugar water before. Amazon is the best at this... using one business to launch a second. So what I'd look for with TSLA is not whether cars can ever justify this price, but whether there is an adjacent business that is actually bigger th…

ARK put out a prospectus that details where they feel Tesla's revenue may come from. Scroll down a page or two and you'll see the tables they're using. https://ark-invest.com/articles/analyst-research/tesla-price...

Wow, they give Tesla a 30% chance of launching a fully autonomous taxi network for revenue in 2021. That seems wildly optimistic.
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