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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

#321

Post by s1artibartfast »

corrral wrote: post #309
otterley wrote: post #218

Earlier quoted context omitted.

Not assuming that at all. I'm saying that if the appraisal doesn't go through, then the lender won't cover the remainder of the purchase price, and then the buyer will have to make up the difference out of his/her own pocket. At that point, I'd bail, because the appraiser is raising a red flag. But since you mention it, in the slower market being discussed here, I would definitely not waive an appraisal contingency.

> At that point, I'd bail, because the appraiser is raising a red flag. The point is, in a lot of markets, if you bailed on offers over this in the last couple years, you wouldn't be winning any bids in the first place, and wouldn't have been able to buy a house at all. The winning bids include guarantees that the buyer will cover the difference. If you won't do that, you'll lose to an all-cash offer from someone who…

Counterpoint: as home prices keep climbing, many of the kind of things that would be caught by a home inspection become less and less financially relevant. When you're buying a million dollar house, 20K for a new roof is in the noise

Re: Tech bubbles are bursting all over the place

#322

Post by duped »

abzolv wrote: post #289
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…

If average Jane, who is not a raving Tesla fan, wants to spend circa $140K on an EV, and she has to choose between the Mercedes EQS 580 and the Tesla Model X, which one would you say is the no-brainer (better value for money)? https://www.mbusa.com/en/vehicles/class/eqs/sedan https://www.tesla.com/modelx That is the future of Tesla. Increasing competition by better products offered by manufacturers with far more expe…

Average Jane doesn't have $140k to spend on a vehicle

Re: Tech bubbles are bursting all over the place

#323

Post by otterley »

corrral wrote: post #309
otterley wrote: post #218

Earlier quoted context omitted.

Not assuming that at all. I'm saying that if the appraisal doesn't go through, then the lender won't cover the remainder of the purchase price, and then the buyer will have to make up the difference out of his/her own pocket. At that point, I'd bail, because the appraiser is raising a red flag. But since you mention it, in the slower market being discussed here, I would definitely not waive an appraisal contingency.

> At that point, I'd bail, because the appraiser is raising a red flag. The point is, in a lot of markets, if you bailed on offers over this in the last couple years, you wouldn't be winning any bids in the first place, and wouldn't have been able to buy a house at all. The winning bids include guarantees that the buyer will cover the difference. If you won't do that, you'll lose to an all-cash offer from someone who…

Something seems a bit off, then, because if the market is appreciating, then the appraisers should be taking that into account. As another commenter said, they were certainly doing that in hot West Coast markets like SF and Seattle. Both houses I purchased (each in those locations) appraised at the contract price, and I bought them both within the last 7 years.

Re: Tech bubbles are bursting all over the place

#324

Post by krasicki »

otterley wrote: post #195
ditonal wrote: post #146

Earlier quoted context omitted.

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 bec…

You mean, "there's a chance".

Re: Tech bubbles are bursting all over the place

#325

Post by colechristensen »

MomoXenosaga wrote: post #306
colechristensen wrote: post #138

Earlier quoted context omitted.

This was driven by extended 0-ish% interest for an entire recession cycle. Unable to get "safe" returns, money chased more dangerous classes of assets and inflated prices. Inflation and a return to nonzero interest means capital gets to retreat to safer ground, pulling the rug out of stupid unprofitable startups that can only make money with head-in-the-clouds IPO valuation or FAANG acquisition.

Is it really a bad thing? Unemployment is pretty low.

Long term, poor allocation of resources into junk work and business that doesn’t make money leads to crashes and periods of high unemployment.

In other words you can’t keep the party going forever and how things are now isn’t an excuse for irresponsibility.

Re: Tech bubbles are bursting all over the place

#326

Post by gamblor956 »

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…

That sounds like a moonshot rather than a $100k, unless you already have a working prototype that simply needs to be refined for commercialization. (Meaning: an actual working prototype, not a demo created solely to show off the concept.) What you've suggested is a job that would take a team of developers a few months. I'm not surprised the investor was skeptical that a 1-man team could do it in 6.

And what are your plans for revenue? How do you plan to make money? You'll be dealing with a lot of legal questions related to IP licensing, and the legal fees alone would eat your $100k in a month or two, even before the licensing costs for the videos.

All-in-all, I can't fault the investor for turning you down. You haven't put enough thought into the business aspects of your idea for him to entrust his money to you.

And don't bring up this crypto bullshit. It's irrelevant that he's investing in crypto companies; he already knows he's gambling with those and he's not treating those like real investments. Given crypto's history, he just needs to bail at the right time to come out ahead.

Re: Tech bubbles are bursting all over the place

#327

Post by chucksmash »

thomasahle wrote: post #228
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…

> Need to buy a house? bid 20% more than asking, if you don't - someone else will.. in cash. Who buys a house in cash? You mean literal suitcases of dollar bills? Or do you just mean something like a bank transfer? What other ways are there to buy something?

> Who buys a house in cash? You mean literal suitcases of dollar bills?

Not literal suitcases of dollar bills, no. Buying with cash here means without taking out a mortgage.

To answer the first question about who buys a house in cash, 28% of buyers do so[1]:

> All-cash sales accounted for 28% of transactions in March, up from both the 25% recorded in February [2022] and from 23% in March 2021.

[1]: https://www.nar.realtor/newsroom/existing-home-sales-slip-2-...

Re: Tech bubbles are bursting all over the place

#328

Post by askafriend »

hiram112 wrote: post #97

I've grown anxious the past few years watching salaries skyrocket while I've played it safe, remaining at my company with years of seniority, but average pay that has been eaten away by COL and inflation increases, though in a very stable industry related to defense. Every time I got the urge to hit Leetcode and start interviewing for a new gig with a 50% pay increase, I remember 2007-2009 and getting laid off from 3…

> Watching the market cool down leads me to believe we're going into another downturn, and I'm becoming more confident I made a good bet by not jumping ship in the last year or two.

It just seems like you're afraid of making a change, and now you've found a new justification to keep avoiding discomfort.

The reality is, there are tons of good companies out there and they will pay $350-400k for senior engineers even in this current market. But go ahead and tell yourself that you made the right decision to do nothing.

Re: Tech bubbles are bursting all over the place

#329

Post by sydd »

garren wrote: post #247
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…

Rising interest rates are starting to slow the housing craziness, at least where I’m at. I was regularly seeing 20-27% over asking with limited to no inspections, new listings going in hours. Nuts. All-cash is basically the new norm. Two years ago that was an issue for regular buyers, but it’s workable now since lenders have jumped into the mix, more and more offer an all-cash option - they make the purchase and tran…

Where I'm from (EU) experts say that prices will stagnate amd the market will slow down.

On one hand the high inflation pushes out lots of buyers -- they can't or don't want to pay the high interest rates. This lowers demand and prices.

On the other hand global supply chain issues (which got much worse with the war) lead to material shortages and rising material costs. This pushes up housing prices.

The net result is likely stagnation -- few houses are built and few exchange owners. But prices stay high.

Except if there will be a large recession causing people to loose their jobs and unable to pay their mortgages. This will crash the housing market, but looks unlikely now.

Re: Tech bubbles are bursting all over the place

#330

Post by dragontamer »

Closi wrote: post #261
algoatecorn wrote: post #230

Earlier quoted context omitted.

What is your definition of earnings? Because Toyota's net income far exceeds Tesla's

Earnings are profit (i.e. revenue less costs). https://www.investopedia.com/terms/e/earnings.asp

Net income is profits, also known as earnings.

Gross income is just an intermediate-step in the way towards the bottom line (net and/or profits).

Its strange that the earlier poster wants to talk about gross instead of net on this point. You can almost always tell that someone is being a bit shady with their arguments when they say "income" or "profits" and then backtrack it to say "Oh, I meant gross income".

When you say "income" or "profits", everyone rightfully assumes you mean "net income", the bottom line. The most important number.

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