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U.S. tech stocks are now priced higher than the entire European stock market.

by baconandeggs 6y ago

ng12 6y ago
And I can use that price to turn my stocks into real, hard cash. It's not like it's funny money.
- baconandeggs 6y ago
  Sure, but "hard cash" is funny money; that's why people investing in FAANG don't want it and prefer stocks.
  - ng12 6y ago
    Fine, but then the EU market is equally funny.
- mamon 6y ago
  You can, but if everyone tried that at once then the price would fall, and most people wouldn't get as much money as they think they now have. So in that sense company valuations are not real. We might pretend that Tesla is worth 2100 USD per share until someone shouts: "Emperor is naked"
- dontworry99 6y ago
  For now. The government is looking to let VCs use 401k’s as Monopoly money. You might go to liquidate only to find that YOUR pension...er investment was lost without you knowing it. https://www.salon.com/2020/06/16/trump-labor-department-quietly-offers-up-401k-plans-to-private-equity-vultures_partner/ https://www.salon.com/2020/06/16/trump-labor-department-quie... “You accepted the rules by buying in. Can’t say you weren’t aware the market is risky!” That’s what they keep telling grandparents when their pensions were flushed down the drain. Let’s keep trusting political grifters of our agency to do right by it despite historical evidence though.
  - jjoonathan 6y ago
    The roaring 20s are back, baby!
  - armitron 6y ago
    You're presenting this as if investors have no choice in the matter. As far as I know, there is 401k transparency meaning that investors know what their money is invested in. On top of that, all companies I've worked for in the USA allowed me to choose exactly how and where my money will be invested. Nothing described by the article you posted lets me think that this will be no longer the case.
    - dontworry99 6y ago
      You’re assuming your behavior is the norm. You are aware that’s possible. Not everyone is. Employers at a lot of companies just pick a default and employees forget about it. It’s not reasonable to expect the masses to babysit ephemeral inventions that they aren’t ever aware of. Ok, man. Yep we should all just stick in our heads this is of course proper application of agency defined “for us”. Paulo Freire is rolling over in his grave. This culture is falling apart because it’s looking for financial efficiency above all else, not emotional resiliency. Just gonna ignore whatever immutable aspects of reality get in the way of that.
  - nightski 6y ago
    I'm confused because back when I had a 401(k) I managed it and chose what investments the money went into. So I don't see how that money would magically flow into private equity? Unless they mean mutual funds could start investing in private equity? But this would show up in the prospectus would it not? Or are they just arguing that many Americans are completely ignorant and oblivious to what their 401(k) is invested in and would accept private equity investments because they blindly follow advice?
    - dontworry99 6y ago
      In my experience, the latter is the case. Look at the mathematical facts: most people live paycheck to paycheck, have no rolling cash savings let alone an emergency fund of months. You think that is a sign most folks are paying attention there very well? But what’s that mean if they do anyway? If everyone has a cool million is that some sign we have enough real supplies to go around in a crisis? To satisfy that potential financial demand of cash for real product? We weren’t producing enough TP to handle a short run on supplies. All energy spent on big finance is purposeful indirection away from truth.
- ex_amazon_sde 6y ago
  > And I can use that price to turn my stocks into real, hard cash you can - but if good fraction of the stockholders were to lose hope and start selling stock the market value would evaporate into thin air very quickly. OTOH if the value of those stocks was 80% backed by stable assets (production plants, building, land, gold, ...) it would evaporate much less quickly. That fits the definition of virtual, speculation-based, value.
  - smabie 6y ago
    I mean, in a lot of cases, it's backed by cash flow. I get what you're saying, but FAANG stocks aren't these pie in the sky high P/E kind of stocks: they are delivering insane revenue and gross profits.

U.S. tech stocks are now priced higher than the entire European stock market.

ng12 6y ago

And I can use that price to turn my stocks into real, hard cash. It's not like it's funny money.

baconandeggs 6y ago
Sure, but "hard cash" is funny money; that's why people investing in FAANG don't want it and prefer stocks.
- ng12 6y ago
  Fine, but then the EU market is equally funny.
mamon 6y ago
You can, but if everyone tried that at once then the price would fall, and most people wouldn't get as much money as they think they now have. So in that sense company valuations are not real. We might pretend that Tesla is worth 2100 USD per share until someone shouts: "Emperor is naked"
dontworry99 6y ago
For now. The government is looking to let VCs use 401k’s as Monopoly money. You might go to liquidate only to find that YOUR pension...er investment was lost without you knowing it. https://www.salon.com/2020/06/16/trump-labor-department-quietly-offers-up-401k-plans-to-private-equity-vultures_partner/ https://www.salon.com/2020/06/16/trump-labor-department-quie... “You accepted the rules by buying in. Can’t say you weren’t aware the market is risky!” That’s what they keep telling grandparents when their pensions were flushed down the drain. Let’s keep trusting political grifters of our agency to do right by it despite historical evidence though.
- jjoonathan 6y ago
  The roaring 20s are back, baby!
- armitron 6y ago
  You're presenting this as if investors have no choice in the matter. As far as I know, there is 401k transparency meaning that investors know what their money is invested in. On top of that, all companies I've worked for in the USA allowed me to choose exactly how and where my money will be invested. Nothing described by the article you posted lets me think that this will be no longer the case.
  - dontworry99 6y ago
    You’re assuming your behavior is the norm. You are aware that’s possible. Not everyone is. Employers at a lot of companies just pick a default and employees forget about it. It’s not reasonable to expect the masses to babysit ephemeral inventions that they aren’t ever aware of. Ok, man. Yep we should all just stick in our heads this is of course proper application of agency defined “for us”. Paulo Freire is rolling over in his grave. This culture is falling apart because it’s looking for financial efficiency above all else, not emotional resiliency. Just gonna ignore whatever immutable aspects of reality get in the way of that.
- nightski 6y ago
  I'm confused because back when I had a 401(k) I managed it and chose what investments the money went into. So I don't see how that money would magically flow into private equity? Unless they mean mutual funds could start investing in private equity? But this would show up in the prospectus would it not? Or are they just arguing that many Americans are completely ignorant and oblivious to what their 401(k) is invested in and would accept private equity investments because they blindly follow advice?
  - dontworry99 6y ago
    In my experience, the latter is the case. Look at the mathematical facts: most people live paycheck to paycheck, have no rolling cash savings let alone an emergency fund of months. You think that is a sign most folks are paying attention there very well? But what’s that mean if they do anyway? If everyone has a cool million is that some sign we have enough real supplies to go around in a crisis? To satisfy that potential financial demand of cash for real product? We weren’t producing enough TP to handle a short run on supplies. All energy spent on big finance is purposeful indirection away from truth.
ex_amazon_sde 6y ago
> And I can use that price to turn my stocks into real, hard cash you can - but if good fraction of the stockholders were to lose hope and start selling stock the market value would evaporate into thin air very quickly. OTOH if the value of those stocks was 80% backed by stable assets (production plants, building, land, gold, ...) it would evaporate much less quickly. That fits the definition of virtual, speculation-based, value.
- smabie 6y ago
  I mean, in a lot of cases, it's backed by cash flow. I get what you're saying, but FAANG stocks aren't these pie in the sky high P/E kind of stocks: they are delivering insane revenue and gross profits.