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U.S. tech stocks are now worth more than the entire European stock market

cnbc.com

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Re: U.S. tech stocks are now worth more than the entire European stock market

#31

Post by est31 »

refurb wrote: post #18
baconandeggs wrote: post #7

Earlier quoted context omitted.

The "growth" in tech has been entirely driven by monetary policy. Google or Facebook or Apple or Netflix or Amazon have done nothing special than what they've been doing for the last 5 years. I wish we were getting insane tech out of this bull run but the truth is there's no "innovation" behind it and their paper is just being used as a shield by investors which is why their stocks keep going up.

The "growth" in tech has been entirely driven by monetary policy. Entirely? Google revenue in 2014 ($66B) to 2019 ($161B) is 143% growth over 5 years. No doubt monetary policy has an effect, but tech companies have grown substantially over that time as well.

They have, but why wasn't that growth priced in?

Re: U.S. tech stocks are now worth more than the entire European stock market

#32

Post by nightski »

dontworry99 wrote: post #13
ng12 wrote: post #5

Earlier quoted context omitted.

And I can use that price to turn my stocks into real, hard cash. It's not like it's funny money.

For now. The government is looking to let VCs use 401k’s as Monopoly money. You might go to liquidate only to find that YOUR pension...er investment was lost without you knowing it. https://www.salon.com/2020/06/16/trump-labor-department-quie... “You accepted the rules by buying in. Can’t say you weren’t aware the market is risky!” That’s what they keep telling grandparents when their pensions were flushed down the d…

I'm confused because back when I had a 401(k) I managed it and chose what investments the money went into. So I don't see how that money would magically flow into private equity? Unless they mean mutual funds could start investing in private equity? But this would show up in the prospectus would it not? Or are they just arguing that many Americans are completely ignorant and oblivious to what their 401(k) is invested in and would accept private equity investments because they blindly follow advice?

Re: U.S. tech stocks are now worth more than the entire European stock market

#33

Post by james412 »

libertine wrote: post #24
Guzba wrote: post #4

The growth in tech stocks has been pretty insane imo. It's so easy to be afraid though and call this another 2000, but we really don't know what the future holds. I wish Europe had it's own set of exciting tech companies. That would be amazing. As a human living on this planet, the more things available to me, the better. Unfortunately, Europe doesn't seem to do much anymore. Google "European growth stocks". I want t…

The problem is not the lack of exciting tech companies, but the ability - and interest - to retain them in Europe. Money is cheap in the US, and most of EU countries are quite pleasant to live without obscene amounts of money in the bank (basically thanks to public services), so any good offer it's quite convincing. Not to mention that EU governments don't see tech companies as strategic assets, unlike the US/China.…

Another aspect of the absent tech boom in Europe is the structure of the public markets, they're basically bullshit compared to what happens in the US.

In the case of growth companies, it's definitely not a talent thing, the American financial system has a well developed pipeline for growing ideas and providing endless access to capital. Europe simply doesn't have that. We don't even have consolidated pricing for our stock markets, even after many decades under the EU, something the US has had since 1976. It's a joke, and no surprise all eyes are on and money flows into the US for speculative investment

Re: U.S. tech stocks are now worth more than the entire European stock market

#34

Post by hogFeast »

refurb wrote: post #18
baconandeggs wrote: post #7

Earlier quoted context omitted.

The "growth" in tech has been entirely driven by monetary policy. Google or Facebook or Apple or Netflix or Amazon have done nothing special than what they've been doing for the last 5 years. I wish we were getting insane tech out of this bull run but the truth is there's no "innovation" behind it and their paper is just being used as a shield by investors which is why their stocks keep going up.

The "growth" in tech has been entirely driven by monetary policy. Entirely? Google revenue in 2014 ($66B) to 2019 ($161B) is 143% growth over 5 years. No doubt monetary policy has an effect, but tech companies have grown substantially over that time as well.

And Microsoft multiplied their profits a few times between 2000 and 2010 while their stock dropped 75%.

Valuations are important. Valuations are affected by the monetary policy/liquidity cycle. And Google's valuation is growing faster than any rational measure of economic value.

Re: U.S. tech stocks are now worth more than the entire European stock market

#35

Post by Silhouette »

drwoland wrote: post #8
Guzba wrote: post #4

The growth in tech stocks has been pretty insane imo. It's so easy to be afraid though and call this another 2000, but we really don't know what the future holds. I wish Europe had it's own set of exciting tech companies. That would be amazing. As a human living on this planet, the more things available to me, the better. Unfortunately, Europe doesn't seem to do much anymore. Google "European growth stocks". I want t…

The sad thing is, at least in the UK start ups are often headquartered in the US to make it easy to chase valley VCs.

Also, we have an annoying amount of red tape from both the UK itself and, at least for the immediate future, the EU. It gets in the way of starting a business, but worse, it gets in the way of taking significant steps necessary to grow a new business like taking on your first employees.

If you've got months or years of runway from external funding, that's irritating but not a big deal. You hire someone to deal with it and get on with more important things.

However, if you're bootstrapped and at first it's just three friends working out of someone's garage or a family business with an office in the dining room, that red tape can be a significant overhead that holds your business back from taking on staff and dedicated facilities and so on.

Given this culture, it's hardly surprising that a lot of UK start-ups with ambitions of hockey stick curves look to the US for support. The alternative is fighting your way out of being a lifestyle business for some number of years, at the same time as trying to do whatever it is you do that actually has value.

Re: U.S. tech stocks are now worth more than the entire European stock market

#36

Post by systemvoltage »

DeonPenny wrote: post #10

Europe growth in the past 12 years has be pretty anemic for the past 10 years. Look at the GDP per capita growth of lets say germany and you get a real good idea of how mismanage their economy has been for the past decade so this doesn't surprise me.

Perhaps you’re getting downvoted for not providing sources. Can you add citations?

Re: U.S. tech stocks are now worth more than the entire European stock market

#37

Post by baconandeggs »

refurb wrote: post #18
baconandeggs wrote: post #7

Earlier quoted context omitted.

The "growth" in tech has been entirely driven by monetary policy. Google or Facebook or Apple or Netflix or Amazon have done nothing special than what they've been doing for the last 5 years. I wish we were getting insane tech out of this bull run but the truth is there's no "innovation" behind it and their paper is just being used as a shield by investors which is why their stocks keep going up.

The "growth" in tech has been entirely driven by monetary policy. Entirely? Google revenue in 2014 ($66B) to 2019 ($161B) is 143% growth over 5 years. No doubt monetary policy has an effect, but tech companies have grown substantially over that time as well.

I didn't say they weren't good businesses, they are solid, profitable and seemingly well run companies and it's why they are being used for shelter.

But let's not confuse profits, or market cap, with innovation or value.

Re: U.S. tech stocks are now worth more than the entire European stock market

#38

Post by ex_amazon_sde »

ng12 wrote: post #5
baconandeggs wrote: post #3

U.S. tech stocks are now priced higher than the entire European stock market.

And I can use that price to turn my stocks into real, hard cash. It's not like it's funny money.

> And I can use that price to turn my stocks into real, hard cash

you can - but if good fraction of the stockholders were to lose hope and start selling stock the market value would evaporate into thin air very quickly.

OTOH if the value of those stocks was 80% backed by stable assets (production plants, building, land, gold, ...) it would evaporate much less quickly.

That fits the definition of virtual, speculation-based, value.

Re: U.S. tech stocks are now worth more than the entire European stock market

#39

Post by QuesnayJr »

sirmoveon wrote: post #21

"Pour water into your wine to create more wine" sort of scenario. Why nobody is talking about the USD being diluted and the inflation effects are embodied in virtual equity valuations?

Because most investors don't believe that the USD is being significantly diluted? I know the idea that inflation is just around the corner is big here on HN, but it's not a big concern on financial markets. The inflation implied by TIPS is only 2% (the Fed target). The value of the dollar is down maybe 10% from last year.

Re: U.S. tech stocks are now worth more than the entire European stock market

#40

Post by _trampeltier »

spideymans wrote: post #14
baconandeggs wrote: post #7

Earlier quoted context omitted.

The "growth" in tech has been entirely driven by monetary policy. Google or Facebook or Apple or Netflix or Amazon have done nothing special than what they've been doing for the last 5 years. I wish we were getting insane tech out of this bull run but the truth is there's no "innovation" behind it and their paper is just being used as a shield by investors which is why their stocks keep going up.

> The "growth" in tech has been entirely driven by monetary policy. For the uninformed, what monetary policy exactly is driving this growth?

There is so much money around now, it has to go somewhere.

Look here for ex. https://fred.stlouisfed.org/series/MABMM301USM189S

https://tradingeconomics.com/united-states/government-debt

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