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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

#191

Post by ant6n »

versale wrote: post #12
freeqaz wrote: 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.

Intel has most of its (cpu) market right now so not exactly a growth stock. The market doesn’t believe in the new growth potentials (gpu, fabs). Intel also pays 3.3% dividend right now, not exactly a growth strategy. Also, the market may stay irrational for a while. Also, many investments are in the form of funds, etfs etc. so stocks will tend to move together, esp if in the same sector.

Re: Tech bubbles are bursting all over the place

#192

Post by tremon »

amelius wrote: post #142
lumost wrote: post #7

Earlier quoted context omitted.

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…

Housing cost is part of how inflation is computed.

That depends. Here in NL, housing costs are explicitly excluded from the official inflation numbers, presumably because housing is still seen as an investment rather than a short.

Re: Tech bubbles are bursting all over the place

#193

Post by mym1990 »

bushbaba wrote: post #73
lumost wrote: post #7

Earlier quoted context omitted.

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…

...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…

Rising interest rates don't typically signify lower home prices because rising interest rates are usually a biproduct of a hot economy that needs to be tempered. With the exception of 2008, home prices have almost never gone down. Now, it may be different this time. There is tons of speculation now and you are starting to see some sectors show big cracks. There was also a massive re-allocation of capital during the pandemic as people moved from high COL places to more reasonable locations(due to remote work), in turn making those new location high COL places.

My theory is that eventually the unemployment rate will start rising, and people who lose their jobs that just got a 600,000$ 2/1 will be in a pretty tight spot. It would lead to either cutting consumption in other parts of life, defaulting on the house, or selling for a loss. And so on and on...

Re: Tech bubbles are bursting all over the place

#194

Post by mirceal »

the_doctah wrote: post #134
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.

You cannot time the market.

When you have invested in something, did you do your DD or did you do it because everyone else did it?

I would recommend a book called "the intelligent investor". I also recommend low fee mutual funds that track the market as the default thing to invest. Once you educate yourself more you can make more sophisticated investments.

I also don't have anything against speculative investments. Just don't call it investing. It's gambling and it's fine as long as you know what you are doing and are okay with basically losing most (everything) you put in.

Re: Tech bubbles are bursting all over the place

#195

Post by otterley »

ditonal wrote: post #146
blagie wrote: post #112

Earlier quoted context omitted.

It's a huge red flag, and it's a hugely common red flag. A startup was peeved I valued their equity at zero when they wouldn't share. I got strong hints my equity was worth at least $100k in extra annual salary, but they wouldn't budge on disclosing anything I could hold them accountable to. I think they were being honest, but I didn't take the job. I did take a previous job like that, and when the company sold, we w…

The reason for the opacity is obvious, they want you to think the equity is worth more than it is. People constantly assume good faith in these things when they shouldn’t. Obviously number of outstanding shares is a bare minimum, but things like cash reserves and cash flow should also be shared but they don’t want to share that information, often times because it’s not good, they just wasn’t people who believe in the…

> ISO (Incentive Stock Options) are one of the biggest scams of all time and you’re financially illiterate if you value them more than zero. They are carefully designed by venture capitalists to screw employees

Given the number of millionaires and billionaires who can credit ISOs for their current wealth, I think that's too broad a statement. At the end of the day, a well-run company that can eventually go public because they have a strong business can be worth joining and the ISOs can be worth something someday. Admittedly, many will not, but if you pick the right one, you could do well.

Re: Tech bubbles are bursting all over the place

#196

Post by kurthr »

ripe wrote: post #171
Robotbeat wrote: post #124

Earlier quoted context omitted.

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.

That is "the market" working for you!

We could allocate resources to productive assets by fiscal spending, but that is prevented by politics. Only when "the market" gets its cut can any infrastructure be built in the US. That's also true for much of the medical establishment and pension/retirement systems. If the market was efficient, we wouldn't be complaining about it. Unfortunately, a "free market" and an efficient market (and you could argue whether infrastructure or medicine or income insurance even make sense as markets) are not the same. Most markets that have many individual consumers require regulation to be even close to efficient. Like political and financial enforcement they are too easy to manipulate and the consequences of malfeasance are substantially less than the profits to be made.

Re: Tech bubbles are bursting all over the place

#197

Post by mirceal »

FredPret wrote: post #190
freeqaz wrote: 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?

25 for a huge tech company is insane, unless there is reason to expect burgeoning profits. The implication is that if you bought them outright, they are going to generate the present level of profits for 25 years before you pay off your investment. How many tech companies have lasted 25 years? How many will last 25 more? 25 makes sense for a startup with potential for explosive growth, not for an established company.

Lol. Tesla would like a word

Re: Tech bubbles are bursting all over the place

#198

Post by epgui »

1minusp wrote: post #104
epgui wrote: post #38

Earlier quoted context omitted.

But it's the tone with which it was said, and the expressiveness of Chair Powell's eyebrows when he said it that was unanticipated. /s

Know that parents comment is /s but in truth, it really feels like interpretations of body language and text to indicate hawkishness/dovishness actually seems to matter.

Yeah, just to clarify, my own "/s" tag in this case didn't mean I wasn't serious, it just meant that I believed the market placed too much emphasis on purely subjective interpretations of things left unsaid.

It's good to try and get all all the data you can, but inferring how someone feels based on extra-textual elements is not a particularly scientific affair. Judges and lawyers commonly say "you can't possibly know how this other person felt" or "you can't possibly know what this other person thought", even when appearances are highly suggestive... for good reason.

Re: Tech bubbles are bursting all over the place

#199

Post by mym1990 »

amelius wrote: post #142
lumost wrote: post #7

Earlier quoted context omitted.

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…

Housing cost is part of how inflation is computed.

This depends. Housing cost if you're considering the price of owning a home is not part of CPI for the same reason that stocks are not a part of CPI, that being they are considered assets.

If you talking about specifically renting housing, then correct(in US).

Re: Tech bubbles are bursting all over the place

#200

Post by ant6n »

prohobo wrote: post #111
triceratops wrote: post #60

Earlier quoted context omitted.

What's your project? $100k seems like an odd amount of money to ask for, to me. You can't staff up very much with that, but it seems like a lot of money to pay for AWS/hosting-type bills when you're just starting out ($10-30k should be more than enough). It only makes sense (again, to me) if what you really want is access to the VC and their network. But again, I don't know shit about VC and angel investing.

It was odd, but my envisioned development window was about 3-4 months (planning for 6) and I had potentially high upkeep after launch ($500-$1000pm for production ready servers). I could have found a co-founder or two and funded them for that period as well. So it would have been just enough + a buffer. At least in my mind. I realize you need more runway than to just get to launch and survive 2-3 months now. The idea…

Sounds very interesting but like also like a big project. Feels like 100K would only fund a demo.
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