Last Time It Was This Crazy, the Stock Market Crashed • Hacker News Board

Re: Last Time It Was This Crazy, the Stock Market Crashed

#61

Post by lotsofmangos » Tue, Oct 14, 2014, 11:45 AM UTC

XorNot wrote: post #50

lotsofmangos wrote: post #44

Earlier quoted context omitted.

I don't think it was a comparison of quality, just an observation of spending clout. Things are being bought at billion dollar valuations that would have failed, just because the top players don't want to even think of risking their dominance, and that isn't going to stop unless they run out of money. This means that some of the easiest exits available are in making things like snapchat, where you will get bought jus…

Which is still a big risk: at some point, the market can crash simply because the dominant players get low on cash to keep making acquisitions like that. Suddenly all the assumptions and valuations people are relying on turn out not match up to reality, and everyone stops investing while they take a long hard look at their books.

Sure, it's a huge risk, not to mention a colossal waste of money for little long term wealth.

Re: Last Time It Was This Crazy, the Stock Market Crashed

#62

Post by mtbcoder » Tue, Oct 14, 2014, 11:57 AM UTC

linkeex wrote: post #53

I've always wondered what pure software startups are doing with millions of dollars. I mean come on you can develop awesome software without having a fancy office, nice furniture and a super high salary. Take me and my friends for example. We love building stuff and work for all our products in university or at home. Also we're doing it for, what, like 400$ a month working 20-30h...

At some point, you will complete school, your friends will go their separate ways and you will lose access to university resources. At that point, you will need a decent salary to pay for living expenses, support a family and all the other things you wish to do in life. If your startup consists of even a handful of people, competitive salaries/benefits start to add up and those "millions" won't seem as much any more.

Re: Last Time It Was This Crazy, the Stock Market Crashed

#63

Post by jmnicolas » Tue, Oct 14, 2014, 1:02 PM UTC

1945 wrote: post #6

The market has the capacity to stay irrational. I would not start shorting after a 3-4% pullback..

I think the complete saying is "the market has the capacity to stay irrational longer than you can remain solvent".

Re: Last Time It Was This Crazy, the Stock Market Crashed

#64

Post by acconrad » Tue, Oct 14, 2014, 1:16 PM UTC

zyx321 wrote: post #49

smt88 wrote: post #30

Earlier quoted context omitted.

I disagree with your premises as well as your argument. WhatsApp, Instagram, and SnapChat are valuable because they have users. There are a million ways to monetize users once you have them, but it's hard to get them. Google, Facebook, and others are large, humming machines that squeeze money out of users, but WhatsApp, Instagram, and SnapChat are not. The latter three companies are valuable because they can be fed i…

How in the world would Uber threaten the United States Postal Service or Deutsche Post? Even if that's a typo and you meant United Parcel Service (UPS), even if we examine DHL independent of its parent company, they are heavily invested in international freight and supply chain management. I see no great benefits there from the ability to summon a cargo plane on a whim with your phone, nor from handing it off to some…

Because Uber could eventually become a cheaper, easier, crowd-sourced version of "the last mile"[1]. This is a huge threat to the thousands of DHL and UPS delivery folk who make a living shipping parcels in the Last Mile, and to the businesses they belong, which make most of their delivery fees via the Last Mile. Unless Uber (or companies like Shyp) partner with them, it could bring these old business models down.

[1] = https://en.wikipedia.org/wiki/Last_mile_(transport)

Re: Last Time It Was This Crazy, the Stock Market Crashed

#65

Post by pjc50 » Tue, Oct 14, 2014, 1:28 PM UTC

rtpg wrote: post #31

tonyedgecombe wrote: post #20

Earlier quoted context omitted.

When western governments hold so much debt the only realistic way of dealing with it is inflation, hence QE.

The really interesting thing about QE is that we haven't really gotten inflation associated with it, at least not in any form bigger than pre-QE days. My pet theory is that money supply and inflation no longer have much of a correlation. In fact, they might never have.

The state of the economy would cause deflation, were it not for rigidity in nominal prices, wages, and interest rates. The expansion of the money supply is mostly just backfilling against deflation, while causing asset prices to inflate in some areas.

Re: Last Time It Was This Crazy, the Stock Market Crashed

#66

Post by makomk » Tue, Oct 14, 2014, 1:38 PM UTC

acconrad wrote: post #64

zyx321 wrote: post #49

Earlier quoted context omitted.

How in the world would Uber threaten the United States Postal Service or Deutsche Post? Even if that's a typo and you meant United Parcel Service (UPS), even if we examine DHL independent of its parent company, they are heavily invested in international freight and supply chain management. I see no great benefits there from the ability to summon a cargo plane on a whim with your phone, nor from handing it off to some…

Because Uber could eventually become a cheaper, easier, crowd-sourced version of "the last mile"[1]. This is a huge threat to the thousands of DHL and UPS delivery folk who make a living shipping parcels in the Last Mile, and to the businesses they belong, which make most of their delivery fees via the Last Mile. Unless Uber (or companies like Shyp) partner with them, it could bring these old business models down. [1…

There's already a cheaper crowd-sourced version of "the last mile" here in the UK. They're called Yodel (formerly the Home Delivery Network), most of their packages are delivered by non-employees using their own cars, lots of big companies like Amazon use them, and they have a really terrible reputation.

Re: Last Time It Was This Crazy, the Stock Market Crashed

#67

Post by joezydeco » Tue, Oct 14, 2014, 1:57 PM UTC

Man, I wish fuckedcompany.com was still around. What's Pud doing these days?

If he won't do it, someone else should. It was a lot of fun back in Crash 1.0 days.

Re: Last Time It Was This Crazy, the Stock Market Crashed

#68

Post by JeremyNT » Tue, Oct 14, 2014, 2:13 PM UTC

acconrad wrote: post #64

zyx321 wrote: post #49

Earlier quoted context omitted.

How in the world would Uber threaten the United States Postal Service or Deutsche Post? Even if that's a typo and you meant United Parcel Service (UPS), even if we examine DHL independent of its parent company, they are heavily invested in international freight and supply chain management. I see no great benefits there from the ability to summon a cargo plane on a whim with your phone, nor from handing it off to some…

Because Uber could eventually become a cheaper, easier, crowd-sourced version of "the last mile"[1]. This is a huge threat to the thousands of DHL and UPS delivery folk who make a living shipping parcels in the Last Mile, and to the businesses they belong, which make most of their delivery fees via the Last Mile. Unless Uber (or companies like Shyp) partner with them, it could bring these old business models down. [1…

I have difficulty imagining any way Uber can compete with an entrenched last mile provider on cost. What possible economic advantage would individuals have in parcel delivery versus an entrenched provider? UPS has massive benefits from economies of scale in terms of route density / fleet maintenance / fuel costs / etc etc, which no individual vehicle operator will ever be able to compete with.

Sure, an Uber driver could charge less for labor, but given that the cost of operating their vehicle will inevitably be more expensive per delivery I expect there is probably no price point at which they can realistically compete.

Perhaps Uber drivers have a path forward in niche delivery services: food, very time sensitive deliveries, rerouted deliveries, etc. But in those areas they will need to compete on quality, and the market for more expensive, higher quality deliveries (while possibly extant) cannot be large enough to represent an existential threat to a company the size as UPS.

Beyond this, I'm curious as to whether it's even in UPS's best interest to continue to service the last mile.

Both UPS[0] and FedEx[1] already have services wherein they partner with the USPS specifically to avoid servicing the last mile. Outsourcing to better/cheaper/more efficient last mile service providers might eliminate a lot of UPS employees and revenue, but the last mile is incredibly expensive to operate. Is the last mile service really a major source of profits when compared to their highly efficient long distance operations?

[0] http://www.ups.com/content/us/en/resources/track/sp_definiti...

[1] http://www.fedex.com/us/smart-post/index.html

Re: Last Time It Was This Crazy, the Stock Market Crashed

#69

Post by mncolinlee » Tue, Oct 14, 2014, 2:31 PM UTC

fidotron wrote: post #22

What's often missing in these discussions is that a lot of the value of the companies is based on the threat they present to actual profitable companies, like Google and Facebook, and has nothing to do with whatever revenue they currently have. The real reason WhatsApp were worth so much is they started to look like an existential threat to Facebook. Similarly for Instagram and SnapChat. Uber will in the long run to…

In the long run, I'm going to suggest Uber is worth very little at all. We're probably ten years away from the first self-driving cab company. It won't be long before electric drive cabs can self-drive themselves to an induction charger, full service car wash, or maintenance shop where the owner has a contract. If the car gets stuck, it can call roadside assistance. There will be no reason to own an office anymore. One can probably even get by without renting a parking space.

The software features which make Uber and Lyft a unique experience will eventually become commoditized.

What happens to companies like Uber when the barriers to entry are so low that margins are non-existent?

Re: Last Time It Was This Crazy, the Stock Market Crashed

#70

Post by danielki » Tue, Oct 14, 2014, 3:17 PM UTC

fidotron wrote: post #22

What's often missing in these discussions is that a lot of the value of the companies is based on the threat they present to actual profitable companies, like Google and Facebook, and has nothing to do with whatever revenue they currently have. The real reason WhatsApp were worth so much is they started to look like an existential threat to Facebook. Similarly for Instagram and SnapChat. Uber will in the long run to…

I wouldn't be surprised if Google acquired Uber or Lyft within the next few years. The massive amount of data one of those companies can provide would beneficial enough to Google to justify the purchase - mapping data for Google maps, traffic data for Google Now/Maps, detailed driving data for the self-driving car project, information about where specific users go (targeted ads, Now, etc), and more.

Additionally, Google's self-driving car technology that it's developing would be best-suited to something like Uber or Lyft. The self-driving car is (at least at first) much better for an on-demand usage model, rather than an ownership model.