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Tech bubbles are bursting all over the place

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Re: Tech bubbles are bursting all over the place

#311

Post by cwkoss »

gonzo41 wrote: post #92
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…

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…

There would need to be some tight regs to make that work, or else large companies would buy up all the housing supply and force everyone to pay them rent.

I think individual home ownership is important, and thats not where I'd want to start cutting.

Credit for second homes being less cheap - totally onboard.

Re: Tech bubbles are bursting all over the place

#312

Post by qeternity »

epgui wrote: post #17
qeternity wrote: post #11

Earlier quoted context omitted.

> Those are normal values for the stock market (20-25). Presuming your experience in equities markets is within the last decade... Historical average is more like 15 for SPX.

If you're doing any fundamental analysis, you're going to end up doing one form or another of a DCF model. The expected rate of growth has a very big influence on your final estimated valuation, and it's normal for companies with a higher expected rate of growth to be valued at higher multiples. Whether the rate of growth will be as high as expected, that is the real question, and it is not a simple one or one you ca…

Thanks bud. Have spent my career trading at hedge funds, with a major focus being US equities.

Re: Tech bubbles are bursting all over the place

#313

Post by Muanh »

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…

Tell me you know nothing about investing without telling me you know nothing about investing. Tesla is very undervalued ATM. Just look at their P/E, growth rate and PEG. Trailing is already below 100 and they are growing profits close to 100% annually.

Re: Tech bubbles are bursting all over the place

#314

Post by s1artibartfast »

danielvaughn wrote: post #101
BurningFrog wrote: post #66

Earlier quoted context omitted.

Can you mention one or two such insights about thinking about engineering from a business perspective?

1. A developers job is not to write code. You happen to write code as part of your job, but your core responsibility is to implement solutions to business problems. Sounds simple, but it's harder to realize in practice. Case in point was a recent freelance job I took on. This client had paid some devs for months of work on a Stripe integration. They had built all this custom code on the front-end and back-end. I came…

I really like #3. If you don't know why you are doing something, it is very unlikely that somebody else knows better.

Re: Tech bubbles are bursting all over the place

#315

Post by mancerayder »

cwilkes wrote: post #303
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.

No broker in their right mind is deliberately underpricing the homes they represent. Why would they? A homeowner talks to another broker and they say they can get 20% more than the first one. Who is the seller going to go with? When we sold our house the broker put it at a fair price. Then along came a couple that’s been outbid a number of times and offered 30% over within 24 hours of listing. Was the home underprice…

They set the price well under market in order to generate interest and visits. Next, in the same time interval multiple people bid, and you get a bidding war. Alternatively, price it at what you want it, and let it sit however long it takes. For hot markets, the former is what is done, in the US at least

Re: Tech bubbles are bursting all over the place

#316

Post by epgui »

qeternity wrote: post #312
epgui wrote: post #17

Earlier quoted context omitted.

If you're doing any fundamental analysis, you're going to end up doing one form or another of a DCF model. The expected rate of growth has a very big influence on your final estimated valuation, and it's normal for companies with a higher expected rate of growth to be valued at higher multiples. Whether the rate of growth will be as high as expected, that is the real question, and it is not a simple one or one you ca…

Thanks bud. Have spent my career trading at hedge funds, with a major focus being US equities.

Then I'm sure I didn't tell you anything you didn't already know :)

I just had no way of knowing your background.

Re: Tech bubbles are bursting all over the place

#317

Post by woeirua »

lvl102 wrote: post #252

This market is so wild. The big techs are making so much money yet the market is in turmoil if you simply remove the big four (Apple, Google, Microsoft and Amazon). There are some great “value” if you look hard enough. People are quick to draw parallel to dotcom, but this one is quite different in so many ways.

The fundamentals that drive each bubble are different, but it always ends the same way.

Re: Tech bubbles are bursting all over the place

#318

Post by r3trohack3r »

kurthr wrote: post #196
ripe wrote: post #171

Earlier quoted context omitted.

> 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 efficien…

> We could allocate resources

When you buy/sell crypto - money changes hands. That money wasn't really "allocated" to crypto, beyond miner fees, just redistributed. That cash still exists.

The resources being allocated are graphics cards, human time, and electricity AFAICT.

The power usage of crypto is relatively small compared to other active human endeavors. It's power usage doesn't approach other arbitrary value stores like gold and government backed fiat markets. Could it go somewhere else? Yeah - but could we reasonably produce enough to offset it in a positive sum game - definitely. As long as renewables are cost efficient (read: truly competitive with non-renewables) and are net-zero on emissions this misallocation of resources would be allocated to renewable power production in an efficient market.

Graphics cards being misallocated... I'm not sure saying markets are inefficient because a financial market is outbidding video gamers is a compelling argument. Scientific use of graphics cards seems like a small part of the market, but I may be mistaken here.5

Re: Tech bubbles are bursting all over the place

#319

Post by JacobThreeThree »

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…

Central bank intervention herded all investors into equities which obviously contributed to the post-2008 bull market, but also distorts price discovery.

But hey, at least the Fed hasn't started buying equities too, like the BOJ.

https://www.bloomberg.com/news/articles/2020-12-06/boj-becom...

Re: Tech bubbles are bursting all over the place

#320

Post by ploika »

cwilkes wrote: post #303
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.

No broker in their right mind is deliberately underpricing the homes they represent. Why would they? A homeowner talks to another broker and they say they can get 20% more than the first one. Who is the seller going to go with? When we sold our house the broker put it at a fair price. Then along came a couple that’s been outbid a number of times and offered 30% over within 24 hours of listing. Was the home underprice…

"Price to Entice" is a very real thing where I live. It's basically a way of getting your listing seen by more people, and increasing the chances of a bidding war pushing up the final sales price.
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