Tech bubbles are bursting all over the place • Hacker News Board

Re: Tech bubbles are bursting all over the place

#201

Post by WalterBright » Fri, May 13, 2022, 5:54 PM UTC

gonzo41 wrote: post #92

lumost wrote: post #7

Earlier quoted context omitted.

Across every investment class there has been a trend of buyers needing to become more financially irresponsible in order to participate in the market. Need to buy a house? bid 20% more than asking, if you don't - someone else will.. in cash. Need to build a ride-hailing app? prepare to pay people to ride indefinitely. Need to own a growth stock? prepare to pay upwards of 100x multiple on revenue. All around, there ha…

This is also a central banking fail in so far that there's that much liquidity in the market that can't find a productive outlet. There's a lot of money, but also not enough concentrated in one spot to do really useful ventures like large infrastructure projects. So instead the money is distorting everything. Imagine if lending was less cheap for home owners but it was still cheap for governments or really large comp…

All that extra cash looking for a use is what causes inflation. It all goes back to supply & demand.

Re: Tech bubbles are bursting all over the place

#202

Post by Robotbeat » Fri, May 13, 2022, 5:55 PM UTC

kurthr wrote: post #196

ripe wrote: post #171

Earlier quoted context omitted.

> non-productive Speculative investments tend to get punished at the end of the cycle by losing all value, thus punishing those invested in it and restoring order. To be precise, the investors who are left holding at the end of the cycle get punished. The early investors who got out make out like robbers. This system incentivizes pump-and-dump.

That is "the market" working for you! We could allocate resources to productive assets by fiscal spending, but that is prevented by politics. Only when "the market" gets its cut can any infrastructure be built in the US. That's also true for much of the medical establishment and pension/retirement systems. If the market was efficient, we wouldn't be complaining about it. Unfortunately, a "free market" and an efficien…

What sucks is that fiscal policy, ie government spending, is also often not very efficient. Even when rampant corruption doesn’t destroy efficiency, crushing bureaucracy or just plain incompetence will. (Is the DMV a model of efficiency?)

So you need a smart balance. And you need competent, honest people in both business AND government.

I don’t think that government necessarily is inefficient. The DMV could be a very efficient place. The fact that it isn’t should cause at least some pause for those advocating more government spending (such as myself).

And the same is true for business. Comcast is terrible. But it doesn’t HAVE to be. Rent-seeking and anti-competitive behavior makes it terrible.

Re: Tech bubbles are bursting all over the place

#203

Post by bink » Fri, May 13, 2022, 5:55 PM UTC

martindbp wrote: post #179

legitster wrote: post #75

This has been a long time coming. Back in the day, there was an inherent understanding that a stock price is supposed to reflect "the fundamentals" - present value of the company + future earnings. And of course there was some amount of speculation around future earnings, but for the most part companies at least tried to be profitable. But if you look at the share price of like, Tesla - it's completely insane. There…

Tesla made more money last quarter than Ford, GM and Toyota. Toyota made 10x the number of cars as Tesla. Tesla is growing vehicle production 50% YoY, while growing profit even faster (having barely hit economies of scale yet). Tesla has a backlog of orders approaching a year in many regions. Everyone else is losing money on their EVs and can't make them in volume production, can't find the batteries for them, becaus…

All of those things can be true and Tesla's stock can also be over-valued. A rapidly growing and popular company doesn't justify any arbitrary valuation.

Re: Tech bubbles are bursting all over the place

#204

Post by BeetleB » Fri, May 13, 2022, 5:55 PM UTC

martindbp wrote: post #179

legitster wrote: post #75

This has been a long time coming. Back in the day, there was an inherent understanding that a stock price is supposed to reflect "the fundamentals" - present value of the company + future earnings. And of course there was some amount of speculation around future earnings, but for the most part companies at least tried to be profitable. But if you look at the share price of like, Tesla - it's completely insane. There…

Tesla made more money last quarter than Ford, GM and Toyota. Toyota made 10x the number of cars as Tesla. Tesla is growing vehicle production 50% YoY, while growing profit even faster (having barely hit economies of scale yet). Tesla has a backlog of orders approaching a year in many regions. Everyone else is losing money on their EVs and can't make them in volume production, can't find the batteries for them, becaus…

> Tesla made more money last quarter than Ford, GM and Toyota.

Net income was higher for Toyota - almost double that of Tesla.

Re: Tech bubbles are bursting all over the place

#205

Post by legitster » Fri, May 13, 2022, 5:55 PM UTC

martindbp wrote: post #179

legitster wrote: post #75

This has been a long time coming. Back in the day, there was an inherent understanding that a stock price is supposed to reflect "the fundamentals" - present value of the company + future earnings. And of course there was some amount of speculation around future earnings, but for the most part companies at least tried to be profitable. But if you look at the share price of like, Tesla - it's completely insane. There…

Tesla made more money last quarter than Ford, GM and Toyota. Toyota made 10x the number of cars as Tesla. Tesla is growing vehicle production 50% YoY, while growing profit even faster (having barely hit economies of scale yet). Tesla has a backlog of orders approaching a year in many regions. Everyone else is losing money on their EVs and can't make them in volume production, can't find the batteries for them, becaus…

I'm not sure where you are getting those numbers from. Ford had $37b in revenue Q4. Tesla had $16b.

Tesla is an impressive company that's managed to finally be profitable. But currently their market cap is higher than all other auto manufacturers combined.

> Everyone else is losing money on their EVs and can't make them in volume production, can't find the batteries for them, you do the math.

That's the thing, this space is getting incredibly crowded this year. Kia/Hyundai, Ford, and VW are all putting out very impressive mass-market EVs that are selling like hotcakes.

Re: Tech bubbles are bursting all over the place

#206

Post by gumby » Fri, May 13, 2022, 5:56 PM UTC

rib3ye wrote: post #173

marcosdumay wrote: post #154

Earlier quoted context omitted.

Governments as a whole have a lot of different hammers for monetary policy. It's just that every other one depends on the Congress understanding the problem and cooperating.

Central banks are not governmental organizations.

Technically they are (everybody who works for the Fed or the Bank of England gets a governmenT paycheck) and in a technical sense they aren’t, or try not to be (independent balance sheets).

But they are involved in policy decisions, being consulted and themselves asking. They do t have an independent mission the way, say, a trucking company does.

Re: Tech bubbles are bursting all over the place

#207

Post by s1artibartfast » Fri, May 13, 2022, 5:56 PM UTC

otterley wrote: post #187

corrral wrote: post #139

Earlier quoted context omitted.

Boring Midwestern City that's not even a 3rd-tier tech hub. Other boring Southern city that's also not even a 3rd-tier tech hub. Buyers are having to take on the risk of having to cover any extra over appraisal in cash, consistently, while that used to be rare (and, yes, usually for "I am super invested, emotionally, in getting this particular house" reasons). My unremarkable suburban house in a boring city that's be…

I think the appraiser is doing you a favor by not appraising it for the contract price in this case. Why would you want to overpay for a house and have to cover the financing shortfall yourself? Especially in a market that traditionally has slow RE price appreciation. Let the cash buyers suffer the losses. You'll thank yourself later.

You're assuming that the deal doesn't go through if it doesn't appraise.

In my market nearly all winning offers have waived the appraisal contingency

Re: Tech bubbles are bursting all over the place

#208

Post by [deleted] » Fri, May 13, 2022, 5:56 PM UTC

otterley wrote: post #187

corrral wrote: post #139

Earlier quoted context omitted.

Boring Midwestern City that's not even a 3rd-tier tech hub. Other boring Southern city that's also not even a 3rd-tier tech hub. Buyers are having to take on the risk of having to cover any extra over appraisal in cash, consistently, while that used to be rare (and, yes, usually for "I am super invested, emotionally, in getting this particular house" reasons). My unremarkable suburban house in a boring city that's be…

I think the appraiser is doing you a favor by not appraising it for the contract price in this case. Why would you want to overpay for a house and have to cover the financing shortfall yourself? Especially in a market that traditionally has slow RE price appreciation. Let the cash buyers suffer the losses. You'll thank yourself later.

[deleted]

Re: Tech bubbles are bursting all over the place

#209

Post by lamontcg » Fri, May 13, 2022, 5:56 PM UTC

legitster wrote: post #75

This has been a long time coming. Back in the day, there was an inherent understanding that a stock price is supposed to reflect "the fundamentals" - present value of the company + future earnings. And of course there was some amount of speculation around future earnings, but for the most part companies at least tried to be profitable. But if you look at the share price of like, Tesla - it's completely insane. There…

I find it funny that crypto supporters will cite the fact that the stock market is acting like a pyramid scheme these days to justify the fact that crypto is no different.

Yeah, that's not the defense of crypto that you think it is...

Re: Tech bubbles are bursting all over the place

#210

Post by WalterBright » Fri, May 13, 2022, 5:57 PM UTC

rib3ye wrote: post #173

marcosdumay wrote: post #154

Earlier quoted context omitted.

Governments as a whole have a lot of different hammers for monetary policy. It's just that every other one depends on the Congress understanding the problem and cooperating.

Central banks are not governmental organizations.

The Federal Reserve banks are.