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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

#361

Post by shrimpx »

the_doctah wrote: post #134
ctime wrote: post #55

I don't think we need the latest Cloud/AI/ML/Crypto/Web3.0 bullshit to spin up fuckedcompany.com again. I remember thinking in ~2015 going to conferences that this shit was never going to last. Then around 2018 driving (sitting) on 101 listening to advertisements for "C3 IoT AI" on NPR thinking, could a company jam more meaningless buzzwords into a single company name? For shits, looked up their stock just and its do…

Any time I ask on some financial forum about moving a chunk of investments to cash I get told that would be stupid, don't try to time the market, and just keep buying. I would have saved myself a bunch of losses if I had done it when I was thinking about it.

“Don’t time the market” is stupid advice. The problem with that advice is that virtually every action you may or may not take is a form of timing the market. People going all in “now as opposed to later” are timing the market. Dollar cost averaging is timing the market. Staying in the market instead of selling is timing the market. People encouraging you to stay in the market because if you sell, that’s “timing the market,” are bullying you into adopting their own strategy for timing the market.

Re: Tech bubbles are bursting all over the place

#362

Post by JoshCole »

JoshCole wrote: post #355
abzolv wrote: post #289

Earlier quoted context omitted.

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…

Current price on your link is ~$100k not $140k. It was much more confusing to use the first site, but click through I found something that was also about $100k when you chose the budget options. Meanwhile, for all numbers that both Tesla and Mercedes list publicly the Model X has better numbers. For example, in horsepower and 0-60 the Tesla does better. For some numbers, the Tesla lists the number - like range - but…

Opened the Mercedes site again to check some more. Tesla allows escalation to ordering in two clicks. After more like seven clicks Mercedes was ready to let me 'save my build' rather than letting me order. They also still continually warn me:

> Due to a worldwide shortage, semiconductor chips that are typically present in our vehicles are limited in supply. This has changed the availability of certain features. Vehicle pricing will vary and depends on the availability of certain features. Please verify with your dealer whether any feature is available in a particular vehicle. To learn more, please see your dealer.

Whereas Tesla just lets me put in the order with delivery in January.

Re: Tech bubbles are bursting all over the place

#363

Post by epgui »

jerf wrote: post #333
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…

This has been what has been confusing me about the market for the past quite-a-while with regard to the tech stocks. Were some of them doing well? Sure. Were some of them basically money fountains that needed just a slight turn to prioritizing profits over growth to make lots of money? Sure. But a lot of the tech giants were priced as if they had not already expanded into well over half the market, but as if they sti…

The devil is certainly in the details, and valuations are often overly optimistic...

But similarly, I believe there are a few really strong companies that are dramatically under-valued today, partly because they (purposefully and strategically) don't turn a profit yet, or because they trade at a very high multiple.

Facebook is not one of the companies I spend a lot of time researching (but don't interpret this as me having a negative view of the stock-- I just have "no view").

Taking the time to read filings, as well as any investor materials these companies put out (with a critical and open mind, of course) goes a really long way.

Re: Tech bubbles are bursting all over the place

#364

Post by maigret »

izzydata wrote: post #118
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…

Over a long enough time frame the stock market and even the whole economy behaves like a pyramid scheme as it is dependent on new generations to be more people than the previous one.

This is not true. The stock market is usually valued after the dividends it can pay over a certain number of years, somewhat between 10 and 20. It’s not infinite. If no further grow comes that’s it and the stock keeps it value and will keep paying dividends for the foreseeable time, and has for already 100 years. Sure investors ask for growth in their communication, but the actual thing they are asking for is a better performance than the rest of the market. You could say this bottoms out at 0 but recent event have shown that low negative interests are possible, because stashing cash has a physical cost.

Many economies can still work well without population growth, other fail despite population growth. If that was the case that population dictates GDP, then investment choices would be very easy.

Re: Tech bubbles are bursting all over the place

#365

Post by martindbp »

randcraw wrote: post #345
martindbp wrote: post #179

Earlier quoted context omitted.

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.

That's just an extremely simplistic analysis, as if there is absolutely no change in the future. Tesla's forward P/E is currently 51. In a years time it might be 30-35. A year after that, well you can see where this is going. There are definitely a few years worth of growth baked in. But when you compare the valuation to the likes of GM, also consider the possibility that they will simply not survive the transition to EVs. They already went bankrupt once, and sales have declined every year since 2016, please have a look at this graph: https://www.statista.com/statistics/225326/amount-of-cars-so... For a great number of reasons, many traditional OEMs will find the next decade very difficult, and that's reflected in their current P/E.

Re: Tech bubbles are bursting all over the place

#366

Post by biorach »

olivermarks wrote: post #26

The problem I have with the Economist these days - they've changed a lot recently as has the Financial Times - is that they are one of the big cheerleaders for creating bubbles out of tech they clearly don't understand. This starves the startups that have compelling and reachable business models and goals because the funding goes to (quite possibly financially scammy) moonshots with vague goals somewhere over the hor…

I'm a regular Economist reader and I really don't recall them cheerleading any tech bubbles. Got some examples?

Re: Tech bubbles are bursting all over the place

#367

Post by paxys »

the_doctah wrote: post #134
ctime wrote: post #55

I don't think we need the latest Cloud/AI/ML/Crypto/Web3.0 bullshit to spin up fuckedcompany.com again. I remember thinking in ~2015 going to conferences that this shit was never going to last. Then around 2018 driving (sitting) on 101 listening to advertisements for "C3 IoT AI" on NPR thinking, could a company jam more meaningless buzzwords into a single company name? For shits, looked up their stock just and its do…

Any time I ask on some financial forum about moving a chunk of investments to cash I get told that would be stupid, don't try to time the market, and just keep buying. I would have saved myself a bunch of losses if I had done it when I was thinking about it.

When would you have sold? When the market was at its "peak" in 2011? Or 2014? Or 2015? Or 2018? Or 2020?

Re: Tech bubbles are bursting all over the place

#368

Post by shrimpx »

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…

The idea that you should treat VC money with the same level of frugality as as your own personal savings is preposterous. Sounds like a petty, inexperienced VC.

Re: Tech bubbles are bursting all over the place

#369

Post by kgwgk »

happythebob wrote: post #43
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.

Right but this is MSFT and AAPL. They're not going anywhere. Inflation is.

I don’t know where they are going but they were trading around ten times earnings less than one decade ago. A PE ratio below 15 may look at some point even more reasonable than the current PE ratio over 25.

Re: Tech bubbles are bursting all over the place

#370

Post by JoshCole »

JoshCole wrote: post #362
JoshCole wrote: post #355

Earlier quoted context omitted.

Current price on your link is ~$100k not $140k. It was much more confusing to use the first site, but click through I found something that was also about $100k when you chose the budget options. Meanwhile, for all numbers that both Tesla and Mercedes list publicly the Model X has better numbers. For example, in horsepower and 0-60 the Tesla does better. For some numbers, the Tesla lists the number - like range - but…

Opened the Mercedes site again to check some more. Tesla allows escalation to ordering in two clicks. After more like seven clicks Mercedes was ready to let me 'save my build' rather than letting me order. They also still continually warn me: > Due to a worldwide shortage, semiconductor chips that are typically present in our vehicles are limited in supply. This has changed the availability of certain features. Vehic…

Lets move away from the ordering experience. My experience with Tesla service is that I notice an issue, then with my phone, I put in a service request. They come to my house while I'm sleeping and fix the issue. Super easy. Painless. By contrast car dealership salesmen and auto mechanics have an infamous reputation.

I find Tesla to be superior. Maybe others won't, but personally - I find them extremely superior. Driving to a dealership sounds pretty lame to me. Especially if I'm having car trouble. Tends to be the kind of thing that makes driving to the dealership a bit annoying, you know?

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