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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

#431

Post by Closi »

s1artibartfast wrote: post #347
Closi wrote: post #255

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 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.

I'm not saying they are worth their valuation, I'm just saying you can't exactly claim/imply that they aren't very profitable compared to others in the market they are operating in.

Also remember that they almost tripled profit in the last year, so that PE ratio will be 1/3 if they manage to do that again. Again, I'm not claiming that it is possible, or that that would be a sensible P/E ratio, or that they aren't overvalued, but P/E can change quickly.

Re: Tech bubbles are bursting all over the place

#432

Post by TSiege »

cmrdporcupine wrote: post #415

So, given this... I have a product idea, along with another technical co-founder. I have a few months savings to feed my family, so I could feasibly work on it fulltime. ... Let's say I came up with a demo, a pitch deck, etc. Would people say the chances of getting seed capital is significantly reduced now? Or do we just not know yet?

From personal experience over the last few months, it's going to be really really tough

Re: Tech bubbles are bursting all over the place

#433

Post by chmod600 »

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…

"the fundamentals... But if you look at the share price of like, Tesla - it's completely insane."

What are the fundamentals of a dollar? Or a bitcoin? Or the Mona Lisa?

Part of being an investor means accepting a certain social value to your investments.

A lot of people want to be a part of the Tesla story. Maybe they buy a car, or maybe a share of stock.

When that story stops being interesting, the PDV of cashflows will start to matter more.

(By the way, PDV starts to be harder to pin down when people can't agree on what inflation even means, let alone what it will be in the future.)

Re: Tech bubbles are bursting all over the place

#434

Post by more_corn »

petra wrote: post #358
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…

The DMV outsourced it's service in some areas. Service improved. So it's possible to benefit from the benefits of public spending and private efficiencies. It's a pretty common method for governments to spend money.

AAA DMV services is amazing. Phenomenally more humanized and efficient. My favorite example of public private partnership.

Re: Tech bubbles are bursting all over the place

#435

Post by sidpatil »

formerkrogemp wrote: post #374
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.

We don't need solar, wind, nuclear, hydro, water reclamation, on shore chip foundries, manufacturing, battery chargers, non-crumbling bridges, manufacturing, paved raids, public transit, or working airports. We need more crud apps and adtech! More stock options and stock buybacks!

What's wrong with CRUD apps? They may be boring to develop, but they tend to be the most useful.

Every single one of those industries uses multiple CRUD apps in the course of their business operations. The database is one of the most important technologies of our civilization.

Re: Tech bubbles are bursting all over the place

#437

Post by Closi »

algoatecorn wrote: post #230
martindbp wrote: post #217

Earlier quoted context omitted.

Earnings, not revenue

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

> Toyota's net income far exceeds Tesla's

Far exceeds? It is only 5% higher so that's a bit of a stretch ($22.4bn vs $21.4bn).

Plus Toyota had shrunk it's net income from 20/21 to 21/22, while it was a 116.86% increase for Tesla, so it would need an optimistic person to think that Tesla hasn't already overtaken in the last few months since 21/22 year end.

Re: Tech bubbles are bursting all over the place

#438

Post by TSiege »

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.

Same. In December I had the urge to sell a bunch of stocks for the sake of cash and peace of mind because the whole market seemed wildly unsustainable. But the "don't time the market" kept being shoved in my face by friends and family. Who could've known /s

Re: Tech bubbles are bursting all over the place

#439

Post by drexlspivey »

JamesBarney wrote: post #422
drexlspivey wrote: post #341

Earlier quoted context omitted.

> 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%

You're saying if interest rates increased and stock price P/E remained the same most funds would allocate less money to bonds? I don't understand why that would be. If the expected future cash flow of one asset increases (bonds), and remains the same for another (stocks) why would you allocate more money to stocks and away from bonds?

The future cash flow of existing bonds is fixed and it does not increase. If you have a bond that pays a 2% annual coupon you will see it's value drop when interest rates increase. The reason is that you can now get a newly issued bond that pays a higher (say 3%) fixed coupon so your's is worth less.

Your bond's price will drop to say 90% of the notional amount while the new bond will trade at 100% so they will effectively have the same "yield" of 3%.

Re: Tech bubbles are bursting all over the place

#440

Post by metamet »

jdlshore wrote: post #76
immigrantheart wrote: post #59

I almost got offer from DoorDash, with obviously RSU as one of the compensation. Eventually didn't get the offer because they said I didn't pass leadership interview. Apparently I was interviewing at one level above I thought I was interviewing (the recruiter messed up). Anyway, I accepted an offer from a hedge fund, comparatively similar, but all cash. Now I feel that I am glad I accepted the hedge fund offer. I don…

Index funds. Check out the Bogleheads subreddit for a levelheaded investing approach.

Seriously. Unless you're looking to gamble, open a Vanguard account and pick an index fund targeting your retirement age or go with one that tracks S&P (VOO).

Vanguard's fees for index funds (esp Admiral shares) are absurdly low, to boot.

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