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What does it mean for American innovation to be backed by oil wealth?

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Re: What does it mean for American innovation to be backed by oil wealth?

#31

Post by toomuchtodo »

GuardianCaveman wrote: post #17
mc32 wrote: post #5

Saudi wealth is seeking to diversify, so its using its patrimony to seek alternative income streams to oil. So good for Saudis. This fund is seeking opportunity in many places, among them SV. That’s also a good thing, for the most part. In short, I don’t see it being so negative that it comes from oil. It’s funneling research away from oil

For me it’s not the oil that’s the problem. It’s the wahabi sect of Saudi, the weekly public execution of bloggers and dissenters. The international kidnapping and torture of journalists, the constant bombing of schools and children in Yemen. It’s THAT money. I worked there on a foreign military sale contract and I saw a lot that disgusted me. The male Filipino workers told me they grow facial hair to make themselves…

This is exactly why Saudi investment should be rejected by the first world. No different than the outrage over Epstein donations and MIT.

Re: What does it mean for American innovation to be backed by oil wealth?

#32

Post by trothamel »

throwaway66920 wrote: post #16
jofer wrote: post #12

One thing to point out: Oil is still _huge_ when it comes to investment and sheer amount of financing available. Anything involving large-scale finance will have oil money involved in it in some way. Frankly, even at the height of the tech boom, the tech industry has never had significant capital available compared to the oil industry. I've worked in both... Folks in tech think 100 million in capital is a lot. In oil…

I was at an iron works a while back where I learned that an industrial grade blast furnace was, ballpark, $100 billion. This was built 100 years ago. That day I decided I just didn’t and wouldn’t ever understand capital markets.

The GDP of the US in 1929 was $105B nominal and $1,109B real. So this blast furnace would have been between 10% and 100% of total GDP. That doesn't seem right.

Re: What does it mean for American innovation to be backed by oil wealth?

#33

Post by wbl »

cloakandswagger wrote: post #24
ISL wrote: post #6

Earlier quoted context omitted.

have to is a strong statement. Public investors need not buy a single share of a mis-valued stock.

That's the problem: Approximately half of the US stock market is made up of passive funds like index trackers which make up a large percentage of American 401k and retirement plan portfolios. As soon as a company IPOs they enter into the portfolio of millions of passive investors, who unwittingly become bagholders for companies like Uber and WeWork that have no sound fundamentals or viable business model. The market…

Index funds don't move capital allocations. Active investors do.

Re: What does it mean for American innovation to be backed by oil wealth?

#34

Post by theklub »

sharadov wrote: post #21

Salman knows that the future is tech, and he's doing the strategic thing by moving Saudi money into other industries and outside of the country.

“My grandfather rode a camel, my father rode a camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a Land Rover, but his son will ride a camel”

Re: What does it mean for American innovation to be backed by oil wealth?

#36

Post by mikeash »

toomuchtodo wrote: post #31
GuardianCaveman wrote: post #17

Earlier quoted context omitted.

For me it’s not the oil that’s the problem. It’s the wahabi sect of Saudi, the weekly public execution of bloggers and dissenters. The international kidnapping and torture of journalists, the constant bombing of schools and children in Yemen. It’s THAT money. I worked there on a foreign military sale contract and I saw a lot that disgusted me. The male Filipino workers told me they grow facial hair to make themselves…

This is exactly why Saudi investment should be rejected by the first world. No different than the outrage over Epstein donations and MIT.

It’s different; it’s much worse. Epstein was retail evil. Saudi Arabia is wholesale evil. Unfortunately, human nature makes it much easier to grasp retail-level evil, so we’re much more horrified by it.

Re: What does it mean for American innovation to be backed by oil wealth?

#37

Post by m_ke »

cloakandswagger wrote: post #24
ISL wrote: post #6

Earlier quoted context omitted.

have to is a strong statement. Public investors need not buy a single share of a mis-valued stock.

That's the problem: Approximately half of the US stock market is made up of passive funds like index trackers which make up a large percentage of American 401k and retirement plan portfolios. As soon as a company IPOs they enter into the portfolio of millions of passive investors, who unwittingly become bagholders for companies like Uber and WeWork that have no sound fundamentals or viable business model. The market…

Even before the IPO you have VC firms raising billion dollar funds from pension funds and endowments to pump up their donkeys. A down round doesn't really matter when you're taking a 2.5% management fee on billions of dollars.

Re: What does it mean for American innovation to be backed by oil wealth?

#38

Post by [deleted] »

mikeash wrote: post #36
toomuchtodo wrote: post #31

Earlier quoted context omitted.

This is exactly why Saudi investment should be rejected by the first world. No different than the outrage over Epstein donations and MIT.

It’s different; it’s much worse. Epstein was retail evil. Saudi Arabia is wholesale evil. Unfortunately, human nature makes it much easier to grasp retail-level evil, so we’re much more horrified by it.

[deleted]

Re: What does it mean for American innovation to be backed by oil wealth?

#39

Post by golergka »

rossdavidh wrote: post #23

Comes close to an important point, and then misses it completely. The problem is not that Saudi money would get them influence at new U.S. tech companies. The problem is that Saudi money is getting pushed into "tech" companies that have unsustainable business models, and this is sucking all the oxygen (e.g. available developers) from other projects that could accomplish more. Imagine two startup ideas. One, could be…

Well that just means that a rational investor would make a killing amid this chaos, wouldn't he?

So, we have to assume that for the last decade, not a single VC in the industry have been rational enough to pick up easy money everybody else is overlooking?

Re: What does it mean for American innovation to be backed by oil wealth?

#40

Post by [deleted] »

mc32 wrote: post #11
save_ferris wrote: post #10

Earlier quoted context omitted.

You don’t see it as a negative that SV has received billions in investment money from a Saudi prince who had a journalist brutally dismembered in the Saudi embassy in Istanbul?

The questions is about taking money from “Oil wealth”. It’s not about who owns the money per se. if that were the case, people would be refusing lots of money. Lots of institutions would have refused Epstein after the first indictment... but they didn’t.

[deleted]
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