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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

#271

Post by martindbp »

TheDarkestSoul wrote: post #225
martindbp wrote: post #179

Earlier quoted context omitted.

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, becaus…

Even if that all were true (it's not), Tesla could be the most important and revolutionary car company since Model-T era Ford and _still_ be insanely overvalued. Before their recent stock slide they were worth as much as every other major manufacturer _combined_. Their P/E ratio hovers around 300. Mercedes-Benz hovers around 5.

Teslas forward P/E, which is way more indicative of the future of the company, is 51: https://finbox.com/NASDAQGS:TSLA/explorer/pe_fwd#:~:text=Tes....

I admit Q2 will be lower than Q1, but Q4 this year will likely see an even lower forward P/E if price remains the same.

Sure, they could be overvalued, I'm just trying to explain why it's valued as it is for those that think it's "insane".

Mercedes hovers around 5 because many investors believe they could go bankrupt if they can't successfully transition to EVs. GM, for example, will very likely go bankrupt (again). Many others as well.

Re: Tech bubbles are bursting all over the place

#272

Post by teepo »

fullshark wrote: post #52
duckfruit wrote: post #14

Earlier quoted context omitted.

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

And no evidence inflation is under control + future rates increases are anticipated as well. I'd love to get a flash poll of the finance industry and see how much people believe 1-8% interest rates are possible over the next 5 years. I bet a lot in the market think 3% interest rates are just not gonna happen.

Looking at some of the prediction markets has some ideas: https://www.metaculus.com/questions/7439/u-s-interest-rate-p...

Re: Tech bubbles are bursting all over the place

#274

Post by peyton »

FredPret wrote: post #224
mirceal wrote: post #197

Earlier quoted context omitted.

Lol. Tesla would like a word

>unless there is reason to expect burgeoning profits >25 makes sense for a startup with potential for explosive growth, not for an established company

They are monopolies/oligopolies with pricing power. That is the reason.

Re: Tech bubbles are bursting all over the place

#275

Post by MAGZine »

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…

ISOs worked out well for me. It wasn't a huge windfall, but the preferential tax treatment is actually quite nice.

Really the best strategy is ISOs that convert to NSOs with 10y exercise windows when you leave. best of both worlds.

Re: Tech bubbles are bursting all over the place

#276

Post by compiler-guy »

olddustytrail wrote: post #181
compiler-guy wrote: post #163

Earlier quoted context omitted.

RIF is an industry standard term with a long history. The problem isn’t others speaking unclearly. It’s assuming others are in the wrong rather than being happy to learn something new.

Indeed it is! Part of the token ring header iirc?

Context is everything. In an economic discussion, one would use the economic meaning.

Re: Tech bubbles are bursting all over the place

#277

Post by joebob42 »

Robotbeat wrote: post #202
kurthr wrote: post #196

Earlier quoted context omitted.

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 efficien…

What sucks is that fiscal policy, ie government spending, is also often not very efficient. Even when rampant corruption doesn’t destroy efficiency, crushing bureaucracy or just plain incompetence will. (Is the DMV a model of efficiency?) So you need a smart balance. And you need competent, honest people in both business AND government. I don’t think that government necessarily is inefficient. The DMV could be a very…

I think by the time you're saying "my system depends on the people in it being honest and competent" you've kind of already lost. Some people are competent, most aren't. Many people are honest, but some aren't. You aren't going to change that so you have to be resilient to it.

Re: Tech bubbles are bursting all over the place

#278

Post by olivermarks »

lamontcg wrote: post #220
olivermarks wrote: post #26

The problem I have with the Economist these days - they've changed a lot recently as has the Financial Times - is that they are one of the big cheerleaders for creating bubbles out of tech they clearly don't understand. This starves the startups that have compelling and reachable business models and goals because the funding goes to (quite possibly financially scammy) moonshots with vague goals somewhere over the hor…

> The sooner we get back to a 'Web 2.0' era like 2008> on the sooner genuine innovation will be funded again. I'd argue it broke in the 90s and we need to go back much further.

90's was complete green fields, it's all been very overcrowded since the dot com recovery but I still agree

Re: Tech bubbles are bursting all over the place

#280

Post by WalterGR »

scollet wrote: post #184
1270018080 wrote: post #176

Earlier quoted context omitted.

You should be buying index funds with a portion of every paycheck

Shouldn't you do this in a bull?

In a bull market you get things for cheap, with the expectation that the bull market will end long enough before your retirement that those assets will increase in value. You basically bought those assets at a discount. Bonus!

Closer to retirement, you wouldn't want to take on that much risk, so you'd move (over time, as you get closer to retirement) to more stable investments. Target-date mutual funds[0] do this automatically.

[0] https://en.wikipedia.org/wiki/Target_date_fund

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