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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

#341

Post by drexlspivey »

JamesBarney wrote: post #123
rubidium wrote: post #9

Earlier quoted context omitted.

Don’t rising interest rates put a downward pressure on p/e as growth (often) requires capital thus loans?

They do, but the biggest way this happens is investors shifting their asset allocations into bonds. So if bonds pay 10% per year a company with a p/e of 30 looks less attractive than if bonds pay 3% per year.

> They do, but the biggest way this happens is investors shifting their asset allocations into bonds.

The opposite is true actually, when rates go up there is a sell-off in bonds which is exactly what is happening right now where bond prices are down 10%-20%

Re: Tech bubbles are bursting all over the place

#342

Post by lotsofpulp »

dominotw wrote: post #308
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…

why is the housing market not budging. Its just lagging other assets?

Supply and demand, of course.

Re: Tech bubbles are bursting all over the place

#344

Post by shrimpx »

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…

> All-cash is basically the new norm.

It’s paradoxical that all-cash became the norm in a period where mortgage rates were at all time lows…

Re: Tech bubbles are bursting all over the place

#345

Post by randcraw »

martindbp wrote: post #179
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…

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…

Tesla's net income in 2021 was $5.5B, GM $8.8B, Ford $11.5B, Toyota $28B.

Tesla's PE ratio is 99.6, GM 5.6, Ford 10.4, Toyota 8.25.

Tesla's market cap is $1,061B, GM $85B, Ford's $83B, Toyota $254B.

The state of Tesla's stock is simply unreal, not based on fundamentals but on inertia and hype.

Re: Tech bubbles are bursting all over the place

#346

Post by MomoXenosaga »

debacle wrote: post #64
prohobo wrote: post #21

People said this was the "best time ever to get funding" for a startup. I disagree. In my view, it was the best time ever if you played a particular game and had the right connections. I pitched an idea to a VC, which I had a prototype for, looking for $100k. He liked it but wouldn't fund because I didn't have a solid business plan. Fair enough, I need to find a business partner. But then he told me something about h…

If you consider VCs as brokers rather than investors, it makes sense. There's a lot more dumb money looking to invest in crypto.

Is there a crypto business that is actually making a profit?

Besides Matt Damon I suppose.

Re: Tech bubbles are bursting all over the place

#347

Post by s1artibartfast »

Closi wrote: post #255
legitster wrote: post #205

Earlier quoted context omitted.

I'm not sure where you are getting those numbers from. Ford had $37b in revenue Q4. Tesla had $16b. Tesla is an impressive company that's managed to finally be profitable. But currently their market cap is higher than all other auto manufacturers combined. > Everyone else is losing money on their EVs and can't make them in volume production, can't find the batteries for them, you do the math. That's the thing, this s…

> I'm not sure where you are getting those numbers from. Ford had $37b in revenue Q4. Tesla had $16b. Tesla makes a 27.4% gross margin on that revenue though, while Ford has a gross margin of 4.8%. > Tesla is an impressive company that's managed to finally be profitable. Although technically true, this is a little misleading as it implies that Tesla is barely profitable - in reality they have moved from 'finally beco…

They still need to 10x their profit to make their current PE of 130 to make sense.

Re: Tech bubbles are bursting all over the place

#348

Post by dangrossman »

SauciestGNU wrote: post #290
Robotbeat wrote: post #202

Earlier quoted context omitted.

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…

People keep using the DMV as an example of government inefficiency, but my state has made it run so painlessly I don't think I've spent more than 15 minutes in an office over the last 5 years. I think government can be efficient if you put technocrats in charge of implementation rather than elected officials who are subject to the electoral whims of the uninformed masses. The problem with the above is it weakens demo…

The DMV in my state requires you make an appointment 4-6 months out right now. Walk-in appointments are unavailable or only available during a few hours a few days a week, if they happen to have staff that day. Good luck if you have your drivers license stolen.

I sold a car of mine to Carvana in October. I returned the license plate to the DMV immediately, which is how they're notified that you no longer own the vehicle, waited 7 days, then cancelled my insurance policy on that car. A month later, I got a letter from the DMV that it is a crime to not carry insurance on my vehicle and I will have to reinstate the insurance and pay a $70 fine for letting it lapse. On the car I no longer own, that was now titled in another state and resold by Carvana already.

It took 2 more months and 3 different forms to get the DMV to accept that I no longer owned the car and to stop pursuing me for this "crime".

Re: Tech bubbles are bursting all over the place

#349

Post by photochemsyn »

bdcravens wrote: post #335
burkaman wrote: post #100

Earlier quoted context omitted.

Searching for "uber" in the Economist archive, I would not classify their coverage as "cheerleading" or even positive. Most articles seem either neutral or negative, including headlines like "Can Uber ever make money?" I would also be interested to see examples of the problem you're describing.

I don't think Uber qualifies as "tech they clearly don't understand". Uber is certainly a company with issues, but it's a clear problem they are solving, adding automation to an industry that's very old.

Uber only still exists because the Saudis dumped $5 billion into them.
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