171–178 of 178 posts
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How does 'the market' properly set prices if everyone blindly buying the same things without any discriminators?
depends entirely on your definition of price. But generally speaking, the idea that the stock market is efficient at allocating resources is just not true. It's an ok-ish thing to say for a 101 course (i.e a first introduction) on the topic, but it very quickly becomes clear how inefficient things can be in practice
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You are right about the numbers. But wrong about what I am thinking: I'm aware, and it's a deliberate choice on my part to allocate in proportion to market cap.
So you’re heavily invested in this AI bubble then. Your biggest holding is Nvidia.
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in the case of airplanes the only thing thats the private market is the planes and the ticket, the entire system of airports, safety, navigation is state subsidized and when the market fails it gets bailed out. the oil is subsidized by constant warfare. it's just an illusion for reganomics so a few rich ppl can make a buck off of a public utility.
How does constant warfare subsidise oil? In case you haven't noticed: both the latest US-vs-Iran war and Russia-vs-Ukraine war have made oil and gas a lot more expensive than the peaceful counterfactual.
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We have seen plenty of examples in other industries where you can never really stop investing a ton on R&D with diminishing returns (like in semiconductors or pharma), because the moment you stop newcomers overtake you. In semiconductors, it almost always become a monopoly or dupoly. x86 CPUs - only AMD and Intel left. Discrete gaming GPUs - only Nvidia and AMD left. 5G chips - only Qualcomm left in western market bu…
Check their R&D expenditures and profit margins they are quite poor. Their revenue has always been sustained by the fact that their technology needs to be constantly replaced because it keeps getting better. The moment it stops getting better, the replacement rates plummet and so do their revenues. It's also really not that hard to compete with them when they get complacent. I'm not counting Nvidia because they don't…
Check their R&D expenditures and profit margins they are quite poor.
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> taking a quote What exactly do you mean here? Like quoting it the right way?
Reddalo omitted the negation when quoting the parent comment. In general its considered rude to quote someone in a way that implies they are saying something different from what they said.
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>you won't get debt if you don't have assets that can be repossessed, so having debt means these AI companies have assets That's the ideal scenario, but you can also have immense debt because someone once thought you had assets.
you're describing risk that's a future worry, you don't get debt in the present without assets
The problem is that even worthless assets will do. (It's why we had a financial crisis in 2008).
As a side note. All money is borrowed. That's how money gets created! Short explainer video by the great late David Graeber https://youtu.be/LxJW7hl8oqM?is=IjdyHwZchaiMHk4C
First, and obviously, the article is talking about capital when they say 'money'. Not all capital is borrowed. Second, not all money is created via borrowing (but the vast majority is!) And the YouTube video you linked to is very confused even about the money that is created via borrowing. Government debt is not required to create money. The Bank of Japan bought stock ETFs to get 'freshly printed' money into circulat…
Bitcoin is NOT a form of money. Silver coins do require a debt, which is taxes people owe which they can use the silver coins to pay.
Graeber wrote about money in great detail in Debt the First 5000 years.
As a side note. All money is borrowed. That's how money gets created! Short explainer video by the great late David Graeber https://youtu.be/LxJW7hl8oqM?is=IjdyHwZchaiMHk4C
Totally depends on what you define money as. If "money" is the some function of all outstanding credit, then yes, it is created (mostly) by bank lending If you define money as a web of trust then it is mostly created by those that create the rules. The state