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Mag 7 starting to underperform [pdf]

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Re: Mag 7 starting to underperform [pdf]

#161

Post by uejfiweun »

forlorn_mammoth wrote: post #160
uejfiweun wrote: post #55

This is probably a hot take and I am by no means a financial expert and this is probably quite wrong. I personally think that attempting to value these companies using the same methodology as the history of all American companies is fundamentally wrong. Sure, some mom and pop small local regional business that overperformed is probably more likely to underperform. But when it comes to big tech companies, these compan…

I respect your humility, and agree that you have an insight. what I am curious about is how you would think about valuing these companies? Let's take it for a given that they are data and capital flywheels, and that this flywheel driven growth will continue for the next 100 years. And say the valuation based on this measure says the company should be worth X today and X_y = X (growth rate per year) (y years) in y yea…

I wish I had a good answer to give you here. I really don't understand financial markets. I more so just have a basic understanding of history and technology - my individual stock purchases are mostly me taking my knowledge base and extrapolating into the future and trying to figure out what companies I think are likely to grow.

As you can probably guess, I mostly try to stick to low-cost index funds, because my above "strategy" is nothing more than gambling.

I'm curious as to what your answers to the question are?

Re: Mag 7 starting to underperform [pdf]

#162

Post by Legend2440 »

entropi wrote: post #157
Legend2440 wrote: post #110

Earlier quoted context omitted.

>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 for them to provide. 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.

But if they do the work for me, then my time is less valuable. If my time is less valuable, I won't pay more to save more of my time.

On the contrary, your time becomes more valuable the more tasks you automate, as your productivity per unit of time goes up.

The time of a factory worker who runs machines producing 200000 widgets per hour is far more valuable than the time of a worker making 1 widget per hour by hand.

Re: Mag 7 starting to underperform [pdf]

#163

Post by entropi »

Legend2440 wrote: post #162
entropi wrote: post #157

Earlier quoted context omitted.

But if they do the work for me, then my time is less valuable. If my time is less valuable, I won't pay more to save more of my time.

On the contrary, your time becomes more valuable the more tasks you automate, as your productivity per unit of time goes up. The time of a factory worker who runs machines producing 200000 widgets per hour is far more valuable than the time of a worker making 1 widget per hour by hand.

Yeah but the money I receive is almost completely decoupled from the value I create. In fact, this can only reduce the value of my time since now my expertise is perceived to be commodified.

Re: Mag 7 starting to underperform [pdf]

#164

Post by Legend2440 »

entropi wrote: post #163
Legend2440 wrote: post #162

Earlier quoted context omitted.

On the contrary, your time becomes more valuable the more tasks you automate, as your productivity per unit of time goes up. The time of a factory worker who runs machines producing 200000 widgets per hour is far more valuable than the time of a worker making 1 widget per hour by hand.

Yeah but the money I receive is almost completely decoupled from the value I create. In fact, this can only reduce the value of my time since now my expertise is perceived to be commodified.

Also not true. The factory worker is paid more than the worker making widgets by hand.

GDP per capita has a strong correlation with average wages. The more productive your economy, the more money the average person makes.

Re: Mag 7 starting to underperform [pdf]

#165

Post by fridder »

Legend2440 wrote: post #164
entropi wrote: post #163

Earlier quoted context omitted.

Yeah but the money I receive is almost completely decoupled from the value I create. In fact, this can only reduce the value of my time since now my expertise is perceived to be commodified.

Also not true. The factory worker is paid more than the worker making widgets by hand. GDP per capita has a strong correlation with average wages. The more productive your economy, the more money the average person makes.

there has been a decoupling of productivity gains and wage increases for some time. Not completely disconnected yet but still

Re: Mag 7 starting to underperform [pdf]

#166

Post by M3L0NM4N »

throw0101d wrote: post #115
M3L0NM4N wrote: post #30

Earlier quoted context omitted.

I mean these stocks have been performers for decades. If you posted this 10 years ago you'd look really wrong.

> I mean these stocks have been performers for decades. If you posted this 10 years ago you'd look really wrong. And Japan performed ridiculously well for over decades and then stagnated for decades after that, but it averaged out between the two periods: > Ben Carlson: It's just a really long mean reversion. You got like 22% per year from 1970 to 1989 in Japan. Small caps in Japan did 30% per year for two decades. >…

IMO, it's an argument against diversification. The Nikkei's decade-long stagnation is proof that the indices that are widely considered "diverse" are not immune to stagnation. This is from a trader/investor's standpoint. Of course, the S&P can return 0% in a few year timeline, but the American economy would really have to stall to return 0% over a 10+ year time horizon. This might shock the Kevin O'Learys and Dave Ramseys of the world, but picking stocks that outperform in any macro environment is easy, you just have to have the stomach for vol and continuously invest.

Re: Mag 7 starting to underperform [pdf]

#167

Post by CamperBob2 »

dualvariable wrote: post #97
patrickk wrote: post #81

Earlier quoted context omitted.

Yes but the Mag 7 is the main focus, suddenly switching to a different set of companies is comparing apples to oranges. That slide belongs in an annex.

That slide should probably be the main focus, with the rest supplementary. That is the slide that is likely to pop the economy.

How so? An economy is all about cash flow, and this is cash flow.

Re: Mag 7 starting to underperform [pdf]

#168

Post by CamperBob2 »

highfrequency wrote: post #61

Hyperscaler free cash flow chart is interesting, but why does it omit Apple?

I'm not sure I actually understand what defines a "hyperscaler" company, but I doubt Apple would be considered one.

They are sitting on their war chest, not spending money on scaling anything anywhere.

Re: Mag 7 starting to underperform [pdf]

#169

Post by CamperBob2 »

edot wrote: post #2

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…

I love how they show OpenRouter’s graph of token usage as if it speaks for usage across the board.

Based on the light-gray shade on your comment, I'm guessing most HN'ers don't understand how questionable that particular graph makes the rest of the presentation look.

It's like publishing a physics textbook and including an appendix on astrology.

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