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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

#131

Post by ilrwbwrkhv »

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…

Yes I am sure a lot of companies are building things that aren't required. But there are so many things were indeed better solutions are required, and if they exist would be worth investing in.

Re: Tech bubbles are bursting all over the place

#132

Post by s1artibartfast »

corrral wrote: post #121
vkou wrote: post #78

Earlier quoted context omitted.

It's not irresponsible to bid 20% over asking. Asking is deliberately underpriced, because it is excellent advertising in a hot RE market. It's irresponsible to bid 20% over what the house is worth (which has nothing to do with asking price), just because you got emotionally attached to the house, and started a bidding war with another person emotionally attached to the house.

It's not "emotionally attached", it's that it's been impossible to buy a house for a while if you're not willing to pay more than it will appraise for . You'll repeatedly lose to buyers who will do that, with cash offers to boot. This has been true even in many cities that aren't trendy, and have been building housing like crazy for a decade.

In what market? In the SF bay area 99% of houses appraise, even if they go 50% or $0.5m over asking

Re: Tech bubbles are bursting all over the place

#133

Post by georgeecollins »

bombcar wrote: post #85
bushbaba wrote: post #73

Earlier quoted context omitted.

...or housing will drop as interest rates go up. And a non insignificant number of folks were over extended in leverage. I know too many folks who did 7/1 ARMs cash out refi to purchase another home in a 7/1 ARM loan, banking not on cashflow but appreciation. I know of folks who bought homes using margin loans in their stock portfolio. If housing stagnates, there will be margin calls, leading to supply shock, and pri…

Margin loans for house purchases isn't as insane as it might sound - assuming your financials are there. Margin interest is deductible against investment gains, house interest may not be for many earners. But not refinancing afterwards into a low fixed rate may come back to bite them, and soon.

>> Margin loans for house purchases isn't as insane as it might sound

I understand the tax logic you are speaking about, but I think tax benefits are sometimes oversold to convince people to buy things (like homes and investments). You aren't a corporation, your liability isn't limited. Trying to shave a bit off taxes may have less benefit to you than the peace of mind of not having to juggle debt. You seem like you understand that when you talk about refinancing asap, so I think you know what you are talking about as well.

Re: Tech bubbles are bursting all over the place

#134

Post by the_doctah »

ctime wrote: post #55

I don't think we need the latest Cloud/AI/ML/Crypto/Web3.0 bullshit to spin up fuckedcompany.com again. I remember thinking in ~2015 going to conferences that this shit was never going to last. Then around 2018 driving (sitting) on 101 listening to advertisements for "C3 IoT AI" on NPR thinking, could a company jam more meaningless buzzwords into a single company name? For shits, looked up their stock just and its do…

Any time I ask on some financial forum about moving a chunk of investments to cash I get told that would be stupid, don't try to time the market, and just keep buying.

I would have saved myself a bunch of losses if I had done it when I was thinking about it.

Re: Tech bubbles are bursting all over the place

#135

Post by eftychis »

legitster wrote: post #75

This has been a long time coming. Back in the day, there was an inherent understanding that a stock price is supposed to reflect "the fundamentals" - present value of the company + future earnings. And of course there was some amount of speculation around future earnings, but for the most part companies at least tried to be profitable. But if you look at the share price of like, Tesla - it's completely insane. There…

They never showed the fundamentals. There are famous money losses throughout the 20th century. [You can google the charts, or check Graham's book or the biography of Buffett, where he went around avoiding such traps or buying failing companies on the cheap and turning them around by cash infusion.] And of course the infamous example of the Tulip Bulb in 17th century.

Companies need to take risk to innovate. A lot as you indicate, and I totally agree, take it too much and doom themselves by never figuring out how to be profitable.

These days simply everything that innovates is "Tech." (Now it's turning similarly to sustainability.) How is Tesla "Tech?" It brands itself as that. By that thinking a lot of other automakers should -- and the autopilot doesn't cut it -- just people don't want to see Toyota stock as "Tech."

The other thing with "Tech" is that if you don't keep pouring your revenue to take more risks until you dominate over others you will die. So fundamentally, all "Tech" stocks strive towards domination via innovation and growth. Amazon (book seller I know) spend the first part of this century with a pretty bad stock and getting tax credits by investing everything in itself and being cheap extremely aggressively. A lot of "Amazons" did not make it.

P.S. If they gave me a 10 year put on Tesla on a sane price I would take it. Alas nobody is taking that bet on the cheap.

P.S.2. The funny thing is it is a self full-filled prophesy. Tesla has the market capital to control debt to try a bunch of stuff until it makes it.

P.S.3. Fundamentals can be used to increase dividends or do buybacks s.t. the stock price will stay/go up. That is the correlation.

P.S.4/tl;dr: The stock market and any commodity market are pyramid schemes -- people get in to make money.

Re: Tech bubbles are bursting all over the place

#136

Post by woeirua »

Victerius wrote: post #5

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.

There is a nonzero chance that all of the "growth" that we've seen over the past 14 years was just fueled by cheap credit. If we can't avoid a recession after raising rates by 100bps then we've had a false economy the entire time. Hope you got to ride the wave while you could.

Re: Tech bubbles are bursting all over the place

#137

Post by mmaunder »

Posted a few comments here re fundamentals. Wanted to add this excellent recent interview with Jamie Dimon discussing the realities of our current environment to help you get a sense of our current environment. https://www.youtube.com/watch?v=Q-5US4J03Wo

Edit: There are incredible little nuggets of fundamental financial wisdom in this conversation. Responding to whether crypto is a hedge against inflation: "The higher inflation goes, the higher the cost of holding an asset that doesn't produce anything."

Re: Tech bubbles are bursting all over the place

#138

Post by colechristensen »

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…

This was driven by extended 0-ish% interest for an entire recession cycle. Unable to get "safe" returns, money chased more dangerous classes of assets and inflated prices.

Inflation and a return to nonzero interest means capital gets to retreat to safer ground, pulling the rug out of stupid unprofitable startups that can only make money with head-in-the-clouds IPO valuation or FAANG acquisition.

Re: Tech bubbles are bursting all over the place

#139

Post by corrral »

s1artibartfast wrote: post #132
corrral wrote: post #121

Earlier quoted context omitted.

It's not "emotionally attached", it's that it's been impossible to buy a house for a while if you're not willing to pay more than it will appraise for . You'll repeatedly lose to buyers who will do that, with cash offers to boot. This has been true even in many cities that aren't trendy, and have been building housing like crazy for a decade.

In what market? In the SF bay area 99% of houses appraise, even if they go 50% or $0.5m over asking

Boring Midwestern City that's not even a 3rd-tier tech hub. Other boring Southern city that's also not even a 3rd-tier tech hub. Buyers are having to take on the risk of having to cover any extra over appraisal in cash, consistently, while that used to be rare (and, yes, usually for "I am super invested, emotionally, in getting this particular house" reasons).

My unremarkable suburban house in a boring city that's been building housing constantly and extensively for the last 10 years, is up like 25% in value over the last 2 years. We thought, based on extensive experience in this market, that we were already paying a bubble-induced premium of 15-20% when we bought it (possibly no longer true—thanks inflation). WTF.

Re: Tech bubbles are bursting all over the place

#140

Post by cercatrova »

prohobo wrote: post #130
cercatrova wrote: post #95

Earlier quoted context omitted.

Maybe you think the investments he made are bad, but obviously he doesn't think so. However, you think your company is good enough to pitch to him to get investment, and he doesn't think so. There's nothing wrong with either side, it's just a difference of opinion. That doesn't necessarily make the "entire industry [...] full of bullshit."

But, it is full of bullshit. Just because it happens to align with my ego doesn't mean I'm wrong to say it. I would say the same thing even if I did get funded.

Again, that is your specific opinion that is not shared by everyone.
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