101–110 of 169 posts
Mag7 is just an arbitrary list of companies that were coined at a specific time with no rigor.
If you must do rigorous analysis, then just like S&P 500 you need to add drop BigTech / High Growth companies continuously to this Mag7 (or Mag10) and then do analysis
I only care what the market is at >25 years from now
OK, I guess it _would_ be pretty hard to have an _unrecoverable_ crash...
Markets are obviously, rationally, not happy about the overspending. But what gives me pause is that a some of the mag 7 (think Meta) could change their mind on AI build-out tomorrow, and 1-year from now have the same amazing free cash flow they always did.
You can tell these guys know nothing about LLMs or how they’re provided. I love how they show OpenRouter’s graph of token usage as if it speaks for usage across the board. DeepSeek looks like the king because people who use Anthropic and OpenAI use them on either a direct basis or AWS Bedrock … And the bar chart for token costs, really? As if that’s information? Their sources are the API docs ffs. If they had at leas…
Apollo Group has $1T assets under management, I believe them over most folks on HN. Their argument that the Mag 7 is burning up all of their free cash flow is factually accurate, as the returns are not materializing for the investments being made (ie underperformance).
Historically stocks that had a good run then tended to underperform: > […] Since 1926, the median ten-year return on individual U.S. stocks relative to the broad equity market is –7.9%, underperforming by 0.82% per year. For stocks that have been among the top 20% performers over the previous five years, the median ten-year market-adjusted return falls to –17.8%, underperforming by 1.94% per year. Since the end of Wo…
> Historically stocks that had a good run then tended to underperform This is more of a mathematical axiom than a financial effect, because you're defining "underperform/overperform" with respect to an average that contains them.
>because you're defining "underperform/overperform" with respect to an average that contains them.
Why is this true? For instance, if you're comparing the GDP growth of countries in the G7, why is it that one country (eg. US) can't consistently overperform year after year?
https://ourworldindata.org/grapher/gdp-per-capita-worldbank?...
Or if you want make it even more clear, you can construct a index consisting of two countries: a normal country (eg. US) and a basketcase (eg. DRC):
https://ourworldindata.org/grapher/gdp-per-capita-worldbank?...
Could outperformance of largest cap companies be partially explained by dividends paid by smaller caps? Reasoning behind this: * Index investing raises in popularity, with index funds that automatically reinvest dividends being often preferred due to their tax efficiency. * Large caps prefer to repurchase stocks, stock repurchases contribute fully towards a given company share price increase. * Smaller caps still pay…
That doesn't work because indices are typically market cap weighted. A stock buyback might increase nominal stock prices, but not the market cap, otherwise it'd be a free money machine.
Earlier quoted context omitted.
Apollo Group has $1T assets under management, I believe them over most folks on HN. Their argument that the Mag 7 is burning up all of their free cash flow is factually accurate, as the returns are not materializing for the investments being made (ie underperformance).
Vanguard has 12T under management so you believe any PDF they put out 12 times more?
I am invested in some of the companies that are downstream of the capital expenditures of Big Tech (e.g., COHR), so I have nothing to complain about. I am really struggling to see what's the investment thesis behind Google valuation increasing 2x in response to AI, though. Assuming no magical AGI singularity, by the end of the day, they're still selling the same services, but the services have gotten more expensive f…
Well, they're hoping to sell new services on expensive $200/month subscriptions.
The hope is that agents have more value than traditional software, because they do the work for you instead of just enabling you to do the work.