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The recent (since the 80s) history of financial ups and downs has been - savings and loan - junk bond - dot com / financial engineering (Enron) - mortgage backed securities - VC Basically, money chases outsized returns, some new thing emerges to satisfy the demand, it becomes effectively a ponzi / house of cards, it falls apart, we shift to the next thing. It's impossible to predict when and what will happen of cours…
I'd argue that crypto fits that bill more than VC.
You have hedge funds like Tiger Global who are now leading/investing in early stage rounds. Anyone with capital can now play “VC”.
VC just means venture capital. It's a generic thing. Any capitalist - in our society, anyone - can supply venture capital; they just have to have enough.
If anything is unnatural, it's thinking of VC as something gatekept and for the elite, as opposed to a generic function which can be fulfilled by millions.
The chart of how much money is still left waiting to be invested in crazy. Looks roughly that 2021 and 2022 have as much money waiting to be invested as 2012 did total. Each year has added that much. So valuations need to come down dramatically is the argument, but the amount of capital trying to get spent is going up astronomically. How does that mismatch resolve in an actual marketplace? Do we assume there are sudd…
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Ah! It seems your crystal ball is working better than mine. Could you tell me how you know a bigger crash is coming?
The ad-supported giants are barely treading water while they absolutely plaster their platforms with ads. I doubt that will sustain them through the next quarter, which is usually the biggest quarter for retail consumers.
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Can you two (@azlyrics, @fny) expand on this - or point to a topical article? When I first saw this @azlyrics comment was dead and I'm wondering what the fuzz is.
Citrix was struggling to borrow $4Bn for a leveraged buyout, they issued bonds that effectively yield 10% annually. That's a massive return we haven't seen forever in fixed income.
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In the previous crash, even viable companies that were growing and made sense were brought close to crisis. Currently Nikola motors is worth a few billion. In a crash they'd be dead.
Your attitude isn't unique, I'd describe it as "It's not a crash until the people/companies I consider fraudulent get destroyed." I hear it about some crypto investors in particular. There's a lot of people who basically consider recessions cosmic justice and want a cleansing fire to reign down on certain entities/people they despise. I propose: that's not what a recession/crash is.
The recent (since the 80s) history of financial ups and downs has been - savings and loan - junk bond - dot com / financial engineering (Enron) - mortgage backed securities - VC Basically, money chases outsized returns, some new thing emerges to satisfy the demand, it becomes effectively a ponzi / house of cards, it falls apart, we shift to the next thing. It's impossible to predict when and what will happen of cours…
crypto?
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That just means the market is illogical though, does not mean a crash must mean all of sudden all investors are logical? As quoted by the famous Keynes, “The market can remain irrational longer than you can remain solvent.” It’s like meme stocks like AMC/APE and GME. Does any of it make sense to me? Nope. Are people making and losing a ton of money? Sure. Is it a good indication of US economy health or dare I say, US…
I guess I would say that a crash is when the market shifts to being illogical towards the negative side, where even seemingly good companies are struggling. I wouldn't call it a crash if there is positive irrationality.
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crypto?
This seems logical but I always think if it was that obvious it would already happen. We don't even know if there is ONE good idea with crypto yet, but there are whole funds and firms dedicated to chasing the plethora of crypto businesses.
Summary: people who buy things write article about how those things should be cheaper.