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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

#171

Post by ripe »

Robotbeat wrote: post #124
gonzo41 wrote: post #92

Earlier quoted context omitted.

This is also a central banking fail in so far that there's that much liquidity in the market that can't find a productive outlet. There's a lot of money, but also not enough concentrated in one spot to do really useful ventures like large infrastructure projects. So instead the money is distorting everything. Imagine if lending was less cheap for home owners but it was still cheap for governments or really large comp…

The money can find a productive outlet, it’s just that for the last 5 years or so, speculative investments (that weren’t productive) had a much higher rate of return. Which is too bad as the productive investments like building a solar power plant really benefitted from the low interest rates that drove the non-productive speculative bubble. non-productive Speculative investments tend to get punished at the end of th…

> non-productive Speculative investments tend to get punished at the end of the cycle by losing all value, thus punishing those invested in it and restoring order.

To be precise, the investors who are left holding at the end of the cycle get punished. The early investors who got out make out like robbers.

This system incentivizes pump-and-dump.

Re: Tech bubbles are bursting all over the place

#172

Post by jeffreyrogers »

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…

> Need to buy a house? bid 20% more than asking, if you don't - someone else will.. in cash.

If you expect inflation to stay high for a while this is actually rational... as long as you still have a job.

Re: Tech bubbles are bursting all over the place

#173

Post by rib3ye »

marcosdumay wrote: post #154
api wrote: post #114

Earlier quoted context omitted.

Central banks have one hammer really: interest rates. Everything is a nail.

Governments as a whole have a lot of different hammers for monetary policy. It's just that every other one depends on the Congress understanding the problem and cooperating.

Central banks are not governmental organizations.

Re: Tech bubbles are bursting all over the place

#175

Post by micromacrofoot »

cercatrova wrote: post #140
prohobo wrote: post #130

Earlier quoted context omitted.

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.

indeed the emperor loves his new clothes

Re: Tech bubbles are bursting all over the place

#177

Post by vkou »

monktastic1 wrote: post #120
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 bears repeating that there is no "what the house is worth" in the abstract. If you somehow know that other bidders will pay at most $X for it, then of course you'd never bid $X * 1.2 -- you'd bid $(X+1). And if lots of people are (or can be made) emotionally attached to a house and pay an apparently unreasonable amount, that is what it's "worth."

> It bears repeating that there is no "what the house is worth" in the abstract.

No, but there is a 'what was selling price for similar homes in this area' price in nearly every specific.

Listing prices are intentially set to be much lower than selling prices. Selling prices are the real prices, listing prices are fiction.

People paying 20% over listing usually means that listing was 20% under selling. Boring! And not financially imprudent!

People paying 20% over average selling in the area, for an equivalent home is what raises my eyebrows as financially imprudent.

Re: Tech bubbles are bursting all over the place

#178

Post by anm89 »

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…

I wouldn't even call it an `understanding` more just a `reality`. Markets can stay irrational longer than you can stay solvent and the last 10 years have been an amazing case in point, but they can't stay irrational literally forever.

There's a gravity to it. At some point whatever is inflating the values artificially is going to hit some kind of force against it and people are going to want the underlying cash flow. It would be the equivalent of a sort of financial perpetual motion machine if this never happened. I'd argue that's not an probability but something more like a law of physics and is actually literally constrained by the laws of physics (it requires continual population growth, consumption growth, and growth of energy use to keep some of these valuations rising)

Re: Tech bubbles are bursting all over the place

#179

Post by martindbp »

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…

Tesla made more money last quarter than Ford, GM and Toyota. Toyota made 10x the number of cars as Tesla. Tesla is growing vehicle production 50% YoY, while growing profit even faster (having barely hit economies of scale yet). Tesla has a backlog of orders approaching a year in many regions. Everyone else is losing money on their EVs and can't make them in volume production, can't find the batteries for them, because they started 10 years too late. That's the reason for Tesla's valuation, it's pretty simple.

Whether you believe the competition will catch up, or Tesla will fail for some other reason is besides the point. I'm just trying to show that the current valuation is not "insane" given current trends, there's a very real logic to it and not (completely) FOMO.

Correction: Toyota's earnings were higher than Tesla, it was operating income that was higher (remembered it wrong).

Re: Tech bubbles are bursting all over the place

#180

Post by 1270018080 »

I'm really hoping a16z's crypto scams collapse too. I don't know how to put it succinctly, but I would get a strong dose of schadenfreude from it. Their buzzword driven business plan and throwing money at actual nonsense is so frustrating. I can't imagine being one of their investors.
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