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Tech bubbles are bursting all over the place

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Re: Tech bubbles are bursting all over the place

#11
post #6

A lot of these companies have very reasonable P/E ratios now. Microsoft is sitting at around 27, Apple 25, and Facebook 15. None of those strike me as "inflated". Those are normal values for the stock market (20-25). Are investors just panicking?

> Those are normal values for the stock market (20-25).

Presuming your experience in equities markets is within the last decade...

Historical average is more like 15 for SPX.

Re: Tech bubbles are bursting all over the place

#12
post #6

A lot of these companies have very reasonable P/E ratios now. Microsoft is sitting at around 27, Apple 25, and Facebook 15. None of those strike me as "inflated". Those are normal values for the stock market (20-25). Are investors just panicking?

Intel’s P/E is 7 right now. So, the other ratios do look inflated.

Re: Tech bubbles are bursting all over the place

#13
post #6

A lot of these companies have very reasonable P/E ratios now. Microsoft is sitting at around 27, Apple 25, and Facebook 15. None of those strike me as "inflated". Those are normal values for the stock market (20-25). Are investors just panicking?

Is 20-25 really normal? I thought it was more like 5-15?

Re: Tech bubbles are bursting all over the place

#14

And all it took was the Federal Reserve raising the federal funds rate by less than 100 bps after a decade and a half of rock bottom rates. I have nothing more to add. I'm going to go outside and breathe some fresh air.

A rate hike that that was widely telegraphed and has been anticipated for years, to boot!

Re: Tech bubbles are bursting all over the place

#16
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…

the fact that you stopped to ask those questions makes me think that you're at minimum, an above average developer.

caring about the business and its fundamentals is important beyond just slinging code.

Re: Tech bubbles are bursting all over the place

#17
post #6

A lot of these companies have very reasonable P/E ratios now. Microsoft is sitting at around 27, Apple 25, and Facebook 15. None of those strike me as "inflated". Those are normal values for the stock market (20-25). Are investors just panicking?

> Those are normal values for the stock market (20-25). Presuming your experience in equities markets is within the last decade... Historical average is more like 15 for SPX.

If you're doing any fundamental analysis, you're going to end up doing one form or another of a DCF model. The expected rate of growth has a very big influence on your final estimated valuation, and it's normal for companies with a higher expected rate of growth to be valued at higher multiples.

Whether the rate of growth will be as high as expected, that is the real question, and it is not a simple one or one you can easily wave off.

Re: Tech bubbles are bursting all over the place

#19
post #12
post #6

A lot of these companies have very reasonable P/E ratios now. Microsoft is sitting at around 27, Apple 25, and Facebook 15. None of those strike me as "inflated". Those are normal values for the stock market (20-25). Are investors just panicking?

Intel’s P/E is 7 right now. So, the other ratios do look inflated.

That’s because the market calculates a high probability of an Intel implosion
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