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When buying the dip doesn’t work: An analysis of the dot-com crash

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Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#341

Post by CPLX »

tedunangst wrote: post #75
rfreiberger wrote: post #41

Earlier quoted context omitted.

One of the big wake up calls I had during that time was a friend telling me about Webvan. At the time I was younger and not investing so the conservation was mostly around how great the food was, cheaper than up scale stores and they delivered. The echo that reflected much of the dot com era was as he mentioned "how do they make money doing this". The wild part is the wages they paid was higher than other delivery dr…

Funny that webvan is always cited as an example of a startup that could never work, but really just an early example of do something that doesn't scale and just keep doing it until you somehow make money. But VCs weren't yet ready for the unicorn burn.

The problem wasn’t the real world part it was the internet. I was there at the time, it was clear there was some value in all the delivery services and so on the issue was that it was so painful and tedious to dial in with a modem and wait for photos to download and navigate the catalog on a 56k (or 128c or whatever) connection, often losing your cart and having to start over.

And that was for those of us that were literary in digital stuff and comfortable with the internet. A lot of people just hadn’t gotten around to using it much yet.

It just wasn’t time yet. And there wasn’t any massive network effect or lock-in to capture like there was with something like a social network.

Being too early is the same thing as being wrong.

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#342

Post by Tiktaalik »

jokethrowaway wrote: post #172
Tiktaalik wrote: post #35

Earlier quoted context omitted.

Every other country did what the Fed did for the same reason: We've experienced (and are still experiencing) a once a century global pandemic. The measures to limit pandemic deaths would have completely destroyed the economy had the governments and their associated banks not taken the measures they took to support people during this difficult time. It's not the Feds fault, it's the pandemic.

Thanks to you authoritarians deciding for us, we will never know for sure. Comparing countries with similar densities (like Sweden and Finland) and different COVID policies seems to point out to a resounding no. Most likely we would have had a few more mostly elderly deaths, we won't have ruined the mental health of a generation and we won't have enriched big pharma even more. Even with the pandemic going on it would…

What recession?

Employment numbers in my jurisdiction are back to normal and thanks to the sort of government intervention we're talking about very few companies went out of business. Where I live everything is pretty much "back to normal."

The government successfully shut down big parts of the economy, kept people alive, and avoided companies going out of business. They did it.

If there is any recession, and it remains to be seen if there will be, it won't be because of local factors, but rather because goings on in China and supply issues stemming from our over-reliance on their manufacturing.

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#343

Post by Ekaros »

kkdaemas wrote: post #312
john_moscow wrote: post #67

Earlier quoted context omitted.

There's a third strategy of "index minus bullshit stocks" where you would include both INTC and AMD stocks for risk hedging, but would leave out things with questionable sustainability like Uber and Netflix that otherwise made it into the index due to the speculative value.

This strategy would miss some huge and unexpected gains. Tesla comes to mind (at least for the time being...)

On other hand it also avoids Tesla when it inevitably crashes to same ballpark as other automotive companies... No I really believe it is nothing special and will eventually come down.

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#344

Post by jallen_dot_dev »

farmerstan wrote: post #301
eastbound wrote: post #151

Earlier quoted context omitted.

Juicero was the mirror product, then: An overpriced orange juice machine, with little packets that you can only buy on subscription, but can’t suspend while on holidays, with a QR code to prevent you from consuming after your holidays. It is also down if it can’t reach the Wifi. It showed that you can overcharge and make everything become a cloud subscription, because money was unlimited on the consumer side this tim…

You, and everyone that responded to you, have no idea what Juicero was. It wasn’t orange juice at all, or any type of fruit juice. It was green juice. The founder made millions selling his chain of green juice stores on the east coast so he short had a history of success. I have a friend that worked there so I even tried the product. I thought the idea was vastly overpriced, but it definitely had the chance of workin…

> It wasn’t orange juice at all, or any type of fruit juice. It was green juice.

This is a distinction without a difference. It doesn't matter what the juice is called. It doesn't change the fact that it's idiotic to pay hundreds of dollars for a machine that just squeezes bags of fruits and vegetables, and needs an Internet connection to ensure you're locked in to only squeezing the company's pricy bags.

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#345

Post by MisterMower »

qgin wrote: post #335
MisterMower wrote: post #329

Earlier quoted context omitted.

Point 2 is false: shares of stock derive their value from the fact that they represent ownership in a company. If the company is profitable or owns valuable assets beyond their liabilities, then the shares themselves are valuable. Their value does not depend on current or future dividends, but on the company’s current assets and the market’s estimation of the value of the company’s future cash flows. Your point about…

But if there is no mechanism for giving cash to the shareholder, ownership is essentially worthless (from a money perspective) except for the possibility of amassing enough ownership to take a controlling stake in the company. But even a controlling stake is just a hobby unless somehow that stake returns cash to you at some point. I agree about assets though. Book value of assets does need to be added to the value of…

You can sell stock to another person. The sale price will be higher, ceteris paribus, because the company is more valuable. This is how you make money investing in companies that don’t pay dividends. Google retained earnings for a more in depth explanation.

Buying shares of stock in a company that doesn’t pay a dividend isn’t investing, it’s the textbook definition of speculation. You are buying something that you hope to sell at a higher price. Investing is when you put money into something, and it gives you more money back over a period of time. Buying and selling crypto is speculation.

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#346

Post by [deleted] »

hn_throwaway_99 wrote: post #92
vitus wrote: post #2

> Buying the dip isn’t some secret strategy. Time is the secret strategy. Ah yes, the good ol' "time in market beats timing the market". Of course, that assumes that markets trend upwards in the (very) long term. Which... if past performance is any indicator of future performance [0], the past 100 years provide a fairly compelling narrative. [0] Another mantra: it's not.

> the past 100 years provide a fairly compelling narrative. In the US. The Nikkei is down over 25% from its peak 32 years ago .

[deleted]

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#347

Post by qeternity »

newshorts wrote: post #88
nathanvanfleet wrote: post #18

Sad to think that investing in the stock market, which I have only been able to financially over the last 5 years might have been much riskier than I might have previously thought. What I previously thought as "okay I just leave it in the stock market for a bit of time to recoup" is something I am now realizing would likely have to be 10+ years. It's kind of funny because I was getting shaky about having money in the…

Don’t worry friend, it’s about the savings rate, not the savings return. Just keep putting a little in here and there. Don’t put in anything you can’t afford to lose and it’ll turn out alright

> Don’t worry friend, it’s about the savings rate, not the savings return.

Yikes, please reconsider your advocacy of this.

As Einstein said: "Compound interest is the eighth wonder of the world."

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#348

Post by baq »

chii wrote: post #265
baq wrote: post #260

Earlier quoted context omitted.

Define far. Gasoline engines eg are within 2x of Carnot limit. Not much room for improvement.

> Not much room for improvement. Only for gasoline engines. And the efficiency limit isn't the limit of possible sources of energy for work. Future engines could be electric, and the power source could be fusion.

fusion takes is to a straight line to exceeding capacity of the planet to radiate waste heat fast enough to keep it habitable. free energy is self destruction. still better than fossil fuels, though.

electric engines require batteries and batteries are super duper enviromentally expensive to make at scales needed right now, let alone the 10y forward predictions.

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#349

Post by jseban »

MisterMower wrote: post #345
qgin wrote: post #335

Earlier quoted context omitted.

But if there is no mechanism for giving cash to the shareholder, ownership is essentially worthless (from a money perspective) except for the possibility of amassing enough ownership to take a controlling stake in the company. But even a controlling stake is just a hobby unless somehow that stake returns cash to you at some point. I agree about assets though. Book value of assets does need to be added to the value of…

You can sell stock to another person. The sale price will be higher, ceteris paribus, because the company is more valuable. This is how you make money investing in companies that don’t pay dividends. Google retained earnings for a more in depth explanation. Buying shares of stock in a company that doesn’t pay a dividend isn’t investing, it’s the textbook definition of speculation. You are buying something that you ho…

> Buying shares of stock in a company that doesn’t pay a dividend isn’t investing, it’s the textbook definition of speculation.

Yeah but this reflects the fact that starting and growing a company in itself is a type of speculative activity. Any optimism about the future is a type of speculation.

If you have a proven profitable business model, that you see no way to scale, there's no reason to list the company in the first place.

The main reason to even list a company is to take it through a growth phase, and companies get taken off the stock exchange all the time when they don't see any forthcoming growth, because then it's only annoying for them to compromise with the power/ownership for no reason.

The stock market is an accelerator for companies, not a central bank that makes absolute valuations.

Re: When buying the dip doesn’t work: An analysis of the dot-com crash

#350

Post by baq »

bushbaba wrote: post #270
baq wrote: post #221

Earlier quoted context omitted.

Inflation will already slow (oil stopped going up), GDP prints are coming in negative, rates are only now accelerating while economy is slowing down. How this doesn’t end in a recession is beyond me. Mortgage workers have been laid off already due to that. Real economy is next on a lag due to demand destruction.

Recession needs just two quarters of negative gdp. Q1 had negative growth. So will q2. We are already in a recession

jury is still out on q2, I expect sub-1% growth, so technically not a recession, but it hardly matters. it's going to be interesting for the next 4 quarters anyway.
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