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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

#541

Post by qiskit »

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…

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

So was the stock prices of amazon, google, etc. You don't expect companies that are opening new industries/businesses to trade like AT&T. You don't expect these companies to pay dividends.

> Tech is a pretty egregious sector because of how many business models basically boil down to "we don't actually need to make money if we have a desirable stock".

Tech companies are some of the most profitable companies in the world. Apple, google, amazon, facebook, etc print money. These companies make more cash profit that your companies with "fundamentals" make in revenue in a decade.

> I don't think we'll be worse off if the next generation of software companies actually focuses on making products people want to buy rather than play games with DAU and user acquisition and etc.

That happens in all industries. From finance to hospital equipment to real estate.

If the bubble is popping, it isn't a tech bubble that's popping, it's an asset bubble that's popping.

Re: Tech bubbles are bursting all over the place

#542

Post by Ekaros »

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.

Yeah problem is pretty clear. And they did provide something.

Real question just like with food delivery is that is there margin there for an big player to exist? Or an expensive player? Paying people to offer singular service is not cheap. And then you have cost of vehicles as well...

Re: Tech bubbles are bursting all over the place

#543

Post by Ekaros »

Animats wrote: post #244

This may be the end of meme investments. Low-end crypto products are collapsing. Some now have a lot of zeroes after the decimal point. * LUNA coin, the backing of UST, dropped from $183 to $0.0001178. UST itself is no longer tradeable. Its blockchain has been turned off. (Apparently that can happen.) * SLP coin, the currency of Axie Infinity's play to earn game, dropped from $0.30 or so to $0.005607. Remember when A…

Now I have serious question. Which big stable coins could just stop being on chain? That is stop all transactions, that aren't just some database entries?

Re: Tech bubbles are bursting all over the place

#544

Post by prepend »

maxlamb wrote: post #396
prepend wrote: post #86

Earlier quoted context omitted.

It’s funny as that was my experience interviewing with companies between 1998-2000. Just insane business models but brazen confidence in themselves. I remember interviewing with a company in 2000 that had burned through like $40 in two years. This was New York and they hired IBM. I don’t remember their product but it was stupid. They had paid IBM to build their own custom app server for Java because their requirement…

$40? Did you mean $40 million?

Yes, thanks. I swear autocorrect is going multiple words back to change things.

They burned $40M.

$40 on their own app server in IBM fees would be pretty cool and interesting in a different way.

Re: Tech bubbles are bursting all over the place

#545

Post by ripper1138 »

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…

You know it’s ok to get rejected on an interview. Almost everyone has been! You don’t need to have an excuse about wrong level even if it is true.

Re: Tech bubbles are bursting all over the place

#546

Post by sankumsek »

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!

I loved me some paid raids! ;)

Snark aside, it is bit disheartening to see all this capital being thrown into handwave-y Web3 verticals.

Re: Tech bubbles are bursting all over the place

#547

Post by Ekaros »

Gravyness wrote: post #23

Tech? like technology? What does it mean? Because surely companies that apply scientific knowledge for practical purposes aren't 'bursting' all over the place, right? Does it refer to specifically these huge companies quoted on the article?

Software and related things as main product. So things that have low marginal cost per unit after they are done...

But really messy as anyone offering some type of platform or an other is also tech... Even if they don't have low marginal costs...

Re: Tech bubbles are bursting all over the place

#548

Post by strikelaserclaw »

mkr-hn wrote: post #539
slickrick216 wrote: post #533

Earlier quoted context omitted.

"The average employee at Uber is barely over 30, which means you've spent your career in a long and unprecedented bull run" - quite an American experience this. Many across Europe and the rest of the world were in a recession until 2014-2015. It was difficult to find a job out of college even with masters degrees in comp sci from tier 1-2 unis.

It's also an American experience outside tech and finance.

its an american experience outside silicon valley.

Re: Tech bubbles are bursting all over the place

#549

Post by daydream »

shrimpx wrote: post #361
the_doctah wrote: post #134

Earlier quoted context omitted.

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 m…

Even God Couldn’t Beat Dollar-Cost Averaging - https://ofdollarsanddata.com/even-god-couldnt-beat-dollar-co... Made the rounds here a couple days ago.

“Don’t time the market” is most certainly not stupid advice.

Re: Tech bubbles are bursting all over the place

#550

Post by adam_arthur »

stjohnswarts wrote: post #295
vishnugupta wrote: post #58

It's fascinating to trace the genesis of present crash to Fed's policies post 2008 crisis. The interest rates were kept artificially low to prevent another Great Depression. 2010s saw an unprecedented rally of tech/growth stocks, fuelled by cheap capital. Growth at all cost was the mantra, hoping companies will turn profitable at some point á la Amazon. Uber's CEO hit the nail on the head when he wrote "The average e…

The market is having issues now not because of inflation being kept low but because people panic when everything isn't going smoothly. The supply chain and WW3 have investors scared, and now they're panicking and leaving the markets and taking their profits with them. Others panick and get what cash they can. Some will buy low and it'll level off soon probably. I think this is more of a pull back than a recession. Ge…

It's almost entirely because of inflation. Persistent inflation raises the discount rate (10y treasury yield), and devalues all other assets.

Why would you buy a 100x PE company (1% yield) when you can get 3% guaranteed today? Even growing at double digit rates, how many years just to match that return? Except many tech companies were 100x PS not even 100x PE. DDOG and NET are two examples.

If the 10y runs to even 3.5-4%, and stays there, we're likely to see a 40-50% haircut in markets.

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