4 ms·
People work with prejudice, if they are aware of it or not. A bunch of companies from the tech sector have managed to earn absurdly high valuations in a short t
by Slartie 7y ago
People work with prejudice, if they are aware of it or not. A bunch of companies from the tech sector have managed to earn absurdly high valuations in a short timespan by successfully monopolizing a winner-takes-all market for a service with high initial cost but very low additional cost per customer. This situation is pretty uniquely found only for a certain subset of digital services, but people have already generalized this kind of approach into the word "tech company" - even though far from all tech companies operate in such kind of markets.
What we see now is the second stage of this: companies which have a marginal involvement of technology in their core business (which is true for basically all companies today) try to paint themselves as "tech companies", with the goal being that investors put them in the same box as Amazon, Microsoft, Netflix, Salesforce et cetera.
And since investors are just as stupid as anyone else and just as susceptible to fall for herd-like behavior as anybody, this strategy works to a certain degree.
- H8crilA 7y agoPrecisely my point. Buy high because "OMG look at those past returns". Perfectly fits George Soros' concepts of fallibility ("tech" as a good label) and reflexivity (past returns drive shit ton of new money). I reckon I should play this like Soros would: first add fuel to the fire, and then short the shit out of the dumpster fire once it becomes clear that it really is a dumpster. And the end is nigh, so keep within reach shortlists of things to short. Too bad our salaries will suffer too. Nothing one can do about that.
- _bxg1 7y agoYeah, I'm not in the valley but I'm worried about a coming bubble-burst. The worst thing is it'll probably affect even those of us who don't work for vapid startups; "tech" will become a bad word instead of a good word, new initiatives even by established companies may dry up, etc. Trying to figure out if there's anything that can be done to prepare.
- H8crilA 7y agoDiversify investments :) It's hard for a qualified specialist to diversify his income revenue, though. Also, with all the bubble-busts it's never total destruction. We may get a haircut to the salary, but I doubt jobs will outright disappear, or even slide into average salary levels.
- perl4ever 7y ago"And since investors are just as stupid as anyone else and just as susceptible to fall for herd-like behavior as anybody" Well, you're commenting in a thread about how they didn't. This is one of those instances where I read something and instantly invert it in my mind and think "that makes a lot more sense".