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Tech bubbles are bursting all over the place

economist.com

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Re: Tech bubbles are bursting all over the place

#241

Post by epc »

thomasahle wrote: post #228
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…

> Need to buy a house? bid 20% more than asking, if you don't - someone else will.. in cash. Who buys a house in cash? You mean literal suitcases of dollar bills? Or do you just mean something like a bank transfer? What other ways are there to buy something?

In cash meaning you don’t make the offer contingent on financing, and you can document the sources of payment (balance sheet, statement from bank or accountant, etc).

Re: Tech bubbles are bursting all over the place

#242

Post by [deleted] »

bradfa wrote: post #211
martindbp wrote: post #179

Earlier quoted context omitted.

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…

Looking at a single quarter is not a great way to compare large companies. Even looking at just a single year is not a great way, but for comparison, in 2021 Tesla had revenue of $54 billion and net income of $5.5 billion. In 2021 Ford had revenue of $136 billion and net income of $17.9 billion. Toyota had similar net income as Ford in 2021. Yes, in the most recently reported quarter Ford lost money. And in previous…

[deleted]

Re: Tech bubbles are bursting all over the place

#243

Post by tomrod »

lumost wrote: post #7
avgDev wrote: post #2

I work for non-tech generating 100million+ in revenue. Cushy job, fully remote, good pay and full autonomy with flexible hours working as an IC. I recently talked to a startup, similar pay, culture would be a better fit since it was mostly techies and I'm a nerd by nature.....but things just got awkward as soon as I asked about their revenue....they were bleeding money and I was told they were being acquired by a big…

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…

Part of this is because bonds have been out of the picture. Bring bonds back as valid investment vehicles, which impacts many other parts of the economy, and we'll see more assets going to "useful" investment like roads, power lines, and so on.

Re: Tech bubbles are bursting all over the place

#244

Post by Animats »

This may be the end of meme investments. Low-end crypto products are collapsing. Some now have a lot of zeroes after the decimal point.

* LUNA coin, the backing of UST, dropped from $183 to $0.0001178. UST itself is no longer tradeable. Its blockchain has been turned off. (Apparently that can happen.)

* SLP coin, the currency of Axie Infinity's play to earn game, dropped from $0.30 or so to $0.005607. Remember when Axie was being touted as the future of play to earn, the way NFTs were going to make poor people in the Philippines rich? That was last year.

Re: Tech bubbles are bursting all over the place

#245

Post by s1artibartfast »

otterley wrote: post #218
s1artibartfast wrote: post #207

Earlier quoted context omitted.

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

Not assuming that at all. I'm saying that if the appraisal doesn't go through, then the lender won't cover the remainder of the purchase price, and then the buyer will have to make up the difference out of his/her own pocket. At that point, I'd bail, because the appraiser is raising a red flag. But since you mention it, in the slower market being discussed here, I would definitely not waive an appraisal contingency.

sure, the appraiser is always providing the buyer a service by giving them an accurate appraisal (more information is better).

If the buyer chooses to proceed, this can be a financial disadvantage reducing access to a highly leveraged loan.

Re: Tech bubbles are bursting all over the place

#246

Post by [deleted] »

martindbp wrote: post #217
legitster wrote: post #205

Earlier quoted context omitted.

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 s…

Earnings, not revenue

[deleted]

Re: Tech bubbles are bursting all over the place

#247

Post by garren »

lumost wrote: post #7
avgDev wrote: post #2

I work for non-tech generating 100million+ in revenue. Cushy job, fully remote, good pay and full autonomy with flexible hours working as an IC. I recently talked to a startup, similar pay, culture would be a better fit since it was mostly techies and I'm a nerd by nature.....but things just got awkward as soon as I asked about their revenue....they were bleeding money and I was told they were being acquired by a big…

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…

Rising interest rates are starting to slow the housing craziness, at least where I’m at. I was regularly seeing 20-27% over asking with limited to no inspections, new listings going in hours. Nuts.

All-cash is basically the new norm. Two years ago that was an issue for regular buyers, but it’s workable now since lenders have jumped into the mix, more and more offer an all-cash option - they make the purchase and transfer it to you under a traditional mortgage. You still have an appraisal gap to contend with, sine they’ll only pay what the place appraises for, but anyone who qualifies for a loan can probably qualify for the all-cash option.

Re: Tech bubbles are bursting all over the place

#248

Post by lumost »

amelius wrote: post #142
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…

Housing cost is part of how inflation is computed.

The owner equivalent rent measure that the Fed uses in the US has been decoupled from Housing prices for a long time. House price increases or rent increases don't necessarily have an impact on inflation if few are paying the marginal rate, and they choose to eat the higher cost rather than asking for more money.

When a critical mass of individuals pay the marginal rate for housing, and they choose to demand more for their services to compensate - then it will show up in the inflation reports. I'd argue that it was a miss for the Fed to focus on owner equivalent rent rather than a broader measure of what consumers are paying for housing as the overall mix of housing has also been changing as the number of investment properties increases.

Re: Tech bubbles are bursting all over the place

#249

Post by martindbp »

bradfa wrote: post #211
martindbp wrote: post #179

Earlier quoted context omitted.

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…

Looking at a single quarter is not a great way to compare large companies. Even looking at just a single year is not a great way, but for comparison, in 2021 Tesla had revenue of $54 billion and net income of $5.5 billion. In 2021 Ford had revenue of $136 billion and net income of $17.9 billion. Toyota had similar net income as Ford in 2021. Yes, in the most recently reported quarter Ford lost money. And in previous…

For Tesla it makes way more sense to use the annualized Q4 numbers vs Ford total 2021 because Tesla grows like crazy, that's the whole point. It doesn't matter that Tesla lost money in the past if they're printing it like there's no tomorrow now, with nothing stopping them (except lock downs). Traditional autos ICE sales have been decreasing and will continue to do so, and they're trying to replace it with EV sales they lose money on, and can't make fast enough to replace their lost ICE sales.

Either way, I get it that you can look at the same data and come to another conclusion, but clearly, for a lot of investors they look at the growth, the barrier to entry, the overall trends and that's why Tesla is valued as it is.

Re: Tech bubbles are bursting all over the place

#250

Post by Animats »

avgDev wrote: post #2

I work for non-tech generating 100million+ in revenue. Cushy job, fully remote, good pay and full autonomy with flexible hours working as an IC. I recently talked to a startup, similar pay, culture would be a better fit since it was mostly techies and I'm a nerd by nature.....but things just got awkward as soon as I asked about their revenue....they were bleeding money and I was told they were being acquired by a big…

but things just got awkward as soon as I asked about their revenue

I've had that conversation. Anyone remember Cuil, the search startup? No revenue. No revenue model. Then no business.

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