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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?

#41

Post by asdfman123 »

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…

The problem here isn't oil but simply the power of the global elite.

I went into this article thinking "So what? The world runs on oil, and oil has a lot of money. Welcome to learning about the economy."

But yeah, it is concerning that private interests that don't share our same niceties about democracy and human rights have power over us.

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

#43

Post by tomp »

rmah wrote: post #30
cloakandswagger wrote: post #24

Earlier quoted context omitted.

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…

Major market index funds do not buy into recently IPO'd stocks because such stocks are not in major market indexes. While pension funds may buy in a little, most will not because recently IPO'd stocks are considered highly volatile and thus outside the remit of their investment objectives. Everyone is not gunning to find the next "unicorn lotto ticket". Lots are, but they are a minority of the money in the equity mar…

Last but not least, some indexes (e.g. S&P 500) have recently changed requirements so that most tech IPOs (which usually have two classes of stocks, one "insider" class that has a lot of votes, and one "general" class that has few (if any) votes) would be ineligible (existing members of the index were grandfathered in).

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

#44

Post by codeulike »

theklub wrote: post #34
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”

Had to look that up, interesting.

https://en.wikipedia.org/wiki/Rashid_bin_Saeed_Al_Maktoum

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

#45

Post by euroPoor »

asdfman123 wrote: post #41
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…

The problem here isn't oil but simply the power of the global elite. I went into this article thinking "So what? The world runs on oil, and oil has a lot of money. Welcome to learning about the economy." But yeah, it is concerning that private interests that don't share our same niceties about democracy and human rights have power over us.

You willingly put up with the ‘global elite’ though.

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

#46

Post by samoa42 »

nradov wrote: post #28
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…

The average cost for an offshore oil drilling rig is now about $650MM. The ones that can go really deep are even more expensive.

MM=B?

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

#48

Post by wayoutthere »

golergka wrote: post #39
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?

There has been too much easy money flying around the VC world for the last 30 years that people have literally forgotten how to operate any other way. People have lived entire careers in this environment, so the rational move for them is the current status quo.

But the paradigm is shifting. Where will we end up? My money is on early 20th century style oligarchic capitalism, but that’s not a very appealing proposition for a lot of people.

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

#49

Post by advisedwang »

samoa42 wrote: post #46
nradov wrote: post #28

Earlier quoted context omitted.

The average cost for an offshore oil drilling rig is now about $650MM. The ones that can go really deep are even more expensive.

MM=B?

In the financial world MM is used to mean million.

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

#50

Post by ryanmarsh »

nradov wrote: post #28
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…

The average cost for an offshore oil drilling rig is now about $650MM. The ones that can go really deep are even more expensive.

I didn't know they were that cheap. A new refinery starts at about $5B.
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