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U.S. tech stocks are now worth more than the entire European stock market

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Re: U.S. tech stocks are now worth more than the entire European stock market

#51

Post by Ericson2314 »

libertine wrote: post #42
Ericson2314 wrote: post #28

Earlier quoted context omitted.

> Not to mention that EU governments don't see tech companies as strategic assets, unlike the US/China. Maybe that was once true, but it certainly isn't true today.

It's still miles away from what's done in the US/China. Like, the whole TikTok thing is being ridiculous, in my point of view. For example, strategic assets for the EU are airlines, or automotive industry, it's where you've seen government intervention. But I'm not saying it's a good thing! In my country China bought the only Energy company we had - how isn't this considered a strategic asset? Sometimes I think EU is…

Well the US only got cozy with big tech after it got big, not actually that different than EU policies you mention being around only existing big industries like automotive.

Only China has taken active steps in fostering those companies from nothing.

Re: U.S. tech stocks are now worth more than the entire European stock market

#52

Post by ginko »

james412 wrote: post #33
libertine wrote: post #24

Earlier quoted context omitted.

The problem is not the lack of exciting tech companies, but the ability - and interest - to retain them in Europe. Money is cheap in the US, and most of EU countries are quite pleasant to live without obscene amounts of money in the bank (basically thanks to public services), so any good offer it's quite convincing. Not to mention that EU governments don't see tech companies as strategic assets, unlike the US/China.…

Another aspect of the absent tech boom in Europe is the structure of the public markets, they're basically bullshit compared to what happens in the US. In the case of growth companies, it's definitely not a talent thing, the American financial system has a well developed pipeline for growing ideas and providing endless access to capital. Europe simply doesn't have that. We don't even have consolidated pricing for our…

If anything it's the obscene amounts of funding in silicon valley that's bullshit.

Re: U.S. tech stocks are now worth more than the entire European stock market

#53

Post by DeonPenny »

systemvoltage wrote: post #36
DeonPenny wrote: post #10

Europe growth in the past 12 years has be pretty anemic for the past 10 years. Look at the GDP per capita growth of lets say germany and you get a real good idea of how mismanage their economy has been for the past decade so this doesn't surprise me.

Perhaps you’re getting downvoted for not providing sources. Can you add citations?

You can google german gpd per capita and get the information from the world bank with a interactive chart.

The German gdp per capita in 2008 was 45k in 2018 47k. The US in same time 48k to 62k. If your country growth rate is number is that slow of course you are going to lag behind

Re: U.S. tech stocks are now worth more than the entire European stock market

#54

Post by cookingrobot »

baconandeggs wrote: post #37
refurb wrote: post #18

Earlier quoted context omitted.

The "growth" in tech has been entirely driven by monetary policy. Entirely? Google revenue in 2014 ($66B) to 2019 ($161B) is 143% growth over 5 years. No doubt monetary policy has an effect, but tech companies have grown substantially over that time as well.

I didn't say they weren't good businesses, they are solid, profitable and seemingly well run companies and it's why they are being used for shelter. But let's not confuse profits, or market cap, with innovation or value.

I can see why you wouldn’t conflate market cap with “value”, but why not profit?

Re: U.S. tech stocks are now worth more than the entire European stock market

#55

Post by dontworry99 »

nightski wrote: post #32
dontworry99 wrote: post #13

Earlier quoted context omitted.

For now. The government is looking to let VCs use 401k’s as Monopoly money. You might go to liquidate only to find that YOUR pension...er investment was lost without you knowing it. https://www.salon.com/2020/06/16/trump-labor-department-quie... “You accepted the rules by buying in. Can’t say you weren’t aware the market is risky!” That’s what they keep telling grandparents when their pensions were flushed down the d…

I'm confused because back when I had a 401(k) I managed it and chose what investments the money went into. So I don't see how that money would magically flow into private equity? Unless they mean mutual funds could start investing in private equity? But this would show up in the prospectus would it not? Or are they just arguing that many Americans are completely ignorant and oblivious to what their 401(k) is invested…

In my experience, the latter is the case.

Look at the mathematical facts: most people live paycheck to paycheck, have no rolling cash savings let alone an emergency fund of months.

You think that is a sign most folks are paying attention there very well?

But what’s that mean if they do anyway?

If everyone has a cool million is that some sign we have enough real supplies to go around in a crisis? To satisfy that potential financial demand of cash for real product?

We weren’t producing enough TP to handle a short run on supplies. All energy spent on big finance is purposeful indirection away from truth.

Re: U.S. tech stocks are now worth more than the entire European stock market

#56

Post by monksy »

sirmoveon wrote: post #21

"Pour water into your wine to create more wine" sort of scenario. Why nobody is talking about the USD being diluted and the inflation effects are embodied in virtual equity valuations?

Because the chickens haven't come to roost yet and they're following trends.

Re: U.S. tech stocks are now worth more than the entire European stock market

#57

Post by Rury »

KMag wrote: post #41
sirmoveon wrote: post #21

"Pour water into your wine to create more wine" sort of scenario. Why nobody is talking about the USD being diluted and the inflation effects are embodied in virtual equity valuations?

If that's the case, one would expect the FX rate changes to equally increase European market valuations, if USD is the unit of account (numerare). If the Euro were being diluted at a rate that kept FX rates in check, then one would expect that to equally buoy European market valuations. So, there may well be something to be said about USD dilution, but I don't see how it affects the relative market capitalizations of…

Not necessarily. It's all supply/demand driven. Just because there's a sudden increase in money available, doesn't necessarily mean everything is going to inflate in valuations. Only things that are in demand will inflate.

Take it this way: If everyone who received a stimulus check this year went "Awesome I'm going to go buy 30 turkeys with this stimulus money!" - The price of turkeys would skyrocket as the demand for turkey's skyrocketed with all the additional money available, but the supply of turkeys didn't proportionally increase. However, the price of shirts would remain relatively the same as the demand didn't skyrocket for shirts. And this effect applies to foreign currencies/foreign stocks... as they're just another thing you can trade dollars for.

This is also why CPI is a garbage metric for inflation. It only tracks certain things, it doesn't track things like stocks or real estate...

Today people mostly have what they need. With all this additional money they received, most go "where do I put this money? Eh may as well put it into stocks..." And they buy stocks that they think are stable and good investments - and only those stock valuations inflate.

Re: U.S. tech stocks are now worth more than the entire European stock market

#58

Post by svachalek »

nightski wrote: post #32
dontworry99 wrote: post #13

Earlier quoted context omitted.

For now. The government is looking to let VCs use 401k’s as Monopoly money. You might go to liquidate only to find that YOUR pension...er investment was lost without you knowing it. https://www.salon.com/2020/06/16/trump-labor-department-quie... “You accepted the rules by buying in. Can’t say you weren’t aware the market is risky!” That’s what they keep telling grandparents when their pensions were flushed down the d…

I'm confused because back when I had a 401(k) I managed it and chose what investments the money went into. So I don't see how that money would magically flow into private equity? Unless they mean mutual funds could start investing in private equity? But this would show up in the prospectus would it not? Or are they just arguing that many Americans are completely ignorant and oblivious to what their 401(k) is invested…

You probably had a nice 401(k). But they're not required to be nice.

Re: U.S. tech stocks are now worth more than the entire European stock market

#59

Post by vharuck »

What's the benefit of lumping all these companies into a single bucket and calling it "tech?" Looking at it as an investor, it's a distracting term. When the pandemic hit, did Uber start making more money like Amazon? If more countries pass laws like the GDPR, will that hurt SalesForce as much as Facebook?

The pandemic is a great test for how we look at the market. If two companies fare wildly differently in an extreme event, were they every really in the same category? If you own a department store, don't "diversify" by investing a lot in Amazon. You'll just get a double whammy whenever disposable income is hurting.

Re: U.S. tech stocks are now worth more than the entire European stock market

#60

Post by SpicyLemonZest »

ginko wrote: post #52
james412 wrote: post #33

Earlier quoted context omitted.

Another aspect of the absent tech boom in Europe is the structure of the public markets, they're basically bullshit compared to what happens in the US. In the case of growth companies, it's definitely not a talent thing, the American financial system has a well developed pipeline for growing ideas and providing endless access to capital. Europe simply doesn't have that. We don't even have consolidated pricing for our…

If anything it's the obscene amounts of funding in silicon valley that's bullshit.

The obscene amounts of funding in Silicon Valley seem like a reasonable consequence of the obscene amounts of profit funded companies sometimes achieve.
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