501–510 of 774 posts
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…
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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…
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…
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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…
The markets are efficient but they aren’t perfect. In any situation the markets will do the best to optimize but will always fall short of perfection . Since markets aren’t perfect that’s why you can make money by speculation.
The problem with markets is a "market efficient" outcome can be catastrophic for social welfare.
During the Irish potato famine the markets allocated food away from Ireland because there were not many there who could afford it. They starved. The market functioned perfectly.
Markets find equilibriums. Total collapse is an equilibrium. Starvation can happen at equilibrium.
You can have 100_000 homeless people at market equalibrium
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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…
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…
Jesus yes. Economists treat all spending like it is equal in value. Stupidity.
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> where employees demanded equivalent pay increases to housing cost increases How can employees realistically speaking even do this?
Well, if you're in California and don't own a house, you move. It's not a great option if you were raised here, but a whole bunch of people can take a small pay cut (especially thinking about down equity and inflation) to move back to their hometowns right now. For me, a home (3/2, 1500sqft) in the neighborhood I'd move to in my hometown (US city; 1 mil metro area) is less than my household income, which we'll realis…
And all it took was the Federal Reserve raising the federal funds rate by less than 100 bps after a decade and a half of rock bottom rates. I have nothing more to add. I'm going to go outside and breathe some fresh air.
There are many more serious factors than simply a rate increase, each of which alone could lead to a recession, all of which come close to guaranteeing one.
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Can you mention one or two such insights about thinking about engineering from a business perspective?
1. A developers job is not to write code. You happen to write code as part of your job, but your core responsibility is to implement solutions to business problems. Sounds simple, but it's harder to realize in practice. Case in point was a recent freelance job I took on. This client had paid some devs for months of work on a Stripe integration. They had built all this custom code on the front-end and back-end. I came…
My job is to write code. Nobody is interested in my opinions about business problems.
I have to be aware, of course. I propose code to write some times, and I have to have some idea that it is a vaguely practical thing in business terms. I want to write code in groovy system A but mundane system B has a better chance of success then my desire for system A goes by the wayside.
But it is my job to write code. That is all.
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…
Not complaining about Tesla stock price as it has the price that people is willing to pay but to me this is definitely a redefinition on what people care when deciding where to invest.
[1] https://www.youtube.com/shorts/vCA79HTry0A?&ab_channel=Roast...
As always, when things crash it's the best time to read the comments
Something that's funny right now is there are a lot of bears gloating about what they think is going to happen in the market and cryptocurrencies the next 2 years without it even having happened yet. They've been waiting literally years for this moment and they think it's finally arrived and can't wait to dance.
You’re talking about mega bears and they’re gloating because the mega bulls talked so much shit in the last 3 years.
But most people are just regular bears and bulls. We don’t comment on the market. We understand the cyclical nature of it. Some of us may have rebalanced portfolios according to our beliefs. That’s about it.
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If you're going to be paid in equity and not asking those questions, unless it's a publicly traded company (where you have these answers ahead of time) or you are getting compensated well above average in cash equivalents, it would be just plain irresponsible to not ask those questions. Even if you are getting paid an extremely good salary, who wants to start working for a company that's potentially months or a year…
It’s statistically irresponsible to think your equity is going to be worth anything in a private company and give up cash compensation.
Otherwise I become shark bait. Been there, done that.