81–90 of 100 posts
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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.
They have, but why wasn't that growth priced in?
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Also, we have an annoying amount of red tape from both the UK itself and, at least for the immediate future, the EU. It gets in the way of starting a business, but worse, it gets in the way of taking significant steps necessary to grow a new business like taking on your first employees. If you've got months or years of runway from external funding, that's irritating but not a big deal. You hire someone to deal with i…
Do you have examples of what you mean by red tape from the EU that prevents a bootstrapped startup from thriving?
I do think it makes growing a business slower and more expensive than it needs to be.
Some examples that come to mind from from recent years are the Consumer Rights Directive (soon to be superseded, but the UK will probably have fully separated from the EU by then), the GDPR and ePrivacy Directive (ditto), and the VAT rules (of which there are so many variations depending on context that I won't even try to list them all here).
To be clear, it's not that I object to things like strong consumer protections or privacy rights. On the contrary, I am a strong advocate of such things, and my own businesses have never done the sort of shady stuff in these areas that tends to attract criticism. I just find the EU's approach to these things unnecessarily onerous and not always effective at achieving its intended goals anyway.
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> 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…
"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?
https://medium.com/navigating-life/we-just-went-from-fractio...
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 extre…
Okay of the 11 GICS sectors, give me examples of what you think some of these companies should be classified as.
Apple: Consumer discretionary (electronics)
Alphabet: Communication services (advertising and fiber networks), health care (mostly research), financials (investing), whatever urban planning is classified under,
Amazon: Consumer discretionary (retail), consumer staples (food)
Microsoft: Industrials (office services), communication services
Facebook: Communication services (chat apps and advertising)
I could be totally off base, and investors do ignore the "tech" label. But from what I've heard in the news and seen in discussions, it doesn't seem so.
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They have, but why wasn't that growth priced in?
What makes you think it wasn't?
What I don't get either is why quarterly reports in the current situation are so important for stock value in the current market climate, as in why did tech stocks soar so much after quarterly reports got announced? These numbers aren't showing anything other than how the companies perform in the current, corona-affected, economy and are not representative of how it's going to look like in a post corona world.
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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.
Big tech has been around for a long time it’s Big Tech FANG that’s new. Apple and Microsoft are not new companies. IBM is old school big tech that’s been cozy with the US Govt for a very long time. Fairchild was big with the government before they produced their first silicon integrated circuit.
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What makes you think it wasn't?
If it was established that they'd grow their revenues, then why was it still outperforming other asset classes by this much? Does Wall street have lacking models of how tech businesses grow? Or are people too risk averse to invest into tech? What I don't get either is why quarterly reports in the current situation are so important for stock value in the current market climate, as in why did tech stocks soar so much a…
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What makes you think it wasn't?
If it was established that they'd grow their revenues, then why was it still outperforming other asset classes by this much? Does Wall street have lacking models of how tech businesses grow? Or are people too risk averse to invest into tech? What I don't get either is why quarterly reports in the current situation are so important for stock value in the current market climate, as in why did tech stocks soar so much a…
Because the future is uncertain, and that uncertainty was baked into the price? And there's nothing to say that "baked into the price" has to be accurate... investors could have collectively read the tea leaves wrong.
> These numbers aren't showing anything other than how the companies perform in the current, corona-affected, economy
Which could be considered passing a stress test with flying colors - maybe people are interpreting this as "which businesses are robust or anti-fragile for a once in a century event". Or just as easily - maybe investors are betting there's a chance that some of this current context is the new normal.
I'm a little confused as to what you're trying to ask overall. Markets and investors aren't perfect, the future is uncertain, and random walks are everywhere.
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> 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.
What speaks against this being true?