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Why are so many unprofitable companies the best performing stocks this year?
- m1117 6y agoIt's psychology-fueled. Also, a lot of companies reinvest profit so they don't have to pay taxes.
- abfan1127 6y agois it fair to say that investors see more return through reinvestment rather than distributions? Reinvestment sees 100% of the capital, but distributions are at best 75%? Assumptions are that the reinvestment creates value fairly quickly and drives the stock price up.
- kgwgk 6y agoThe company could also distribute profits to investors repurchasing shares.
- bumby 6y ago>companies reinvest profit There central company to the article’s point (Snowflake) has no profit to reinvest
- polote 6y agoit does actually, when you reinvest profit you don't make any profit. They reinvest the money before it could become profit, mostly by hiring more sales
- bumby 6y agoIsn’t that exactly what the article is claiming they should do? Investing in sales and marketing now to drive future annuities isn’t the same strategy as reinvesting profits to dodge taxes as the OP claims
- kgwgk 6y agoDepends on what do you mean by "reinvest". If you have $1b in profits and build a $1bn factory you still have to pay almost the same taxes. If you increase payroll in the current year by $1bn you won't make a profit and you won't pay taxes... but it may not be as good an investment.
- HarryHirsch 6y agoDon't they use accounting tricks these days so they can keep their cash and then carry it to the stock market? This has the double advantage to keep the stock market inflated and compared to R&D where you risk product failure, the stock market is backstopped by the government and risk-free. That's why we don't have flying cars. Instead of investment in core competencies we invest in the market.
- deelowe 6y agoWe don't have flying cars because it's a silly concept.
- NikolaeVarius 6y agoWe have flying cars. They are called Helicopters.
- ConcernedCoder 6y agoHave you SEEN the way most people drive?
- InitialLastName 6y agoUgh flying cars would require a whole different level of infrastructure to protect pedestrians and property from idiots/malignants in vehicles. We already have giant cement blocks and metal poles everywhere, now we need human-permeable cages.
- ertemplin 6y agoYou should take an intro flight lesson at a flight school. There's no way the majority of people could safely fly a personal aircraft in all weather conditions. Flying cars will have to be 100% dependent on a really good autopilot which hasn't been developed yet (which I guess is sort of the point you're trying to make).
- optimusclimb 6y agoThe ads on that site made me give up on the article.
- nabla9 6y agoSmall speculative unprofitable growth companies outside the major indexes are usually always the best performing stocks, because stocks in the same category are in the list of worst performing too. They have huge volatility.
- xoxoy 6y agolol at “small” Tesla has 10x’d from a year and now at a $420B valuation. That makes it one of the largest companies in the world (I believe top 15) All the companies that fit in this category like Carvana, Wayfair, Overstock etc are now at $10B-$30B valuations. Point is these are not small by any means.
- d23 6y agoWhy would you use the market cap as a measure for large when we're discussing overvaluation? It seems like more fundamental measures (revenue, earnings, market share) would be more appropriate.
- xoxoy 6y agowhat does that have to do with my response?
- nabla9 6y agoCompany size is measured in revenue, not valuation. Tesla is not small anymore by revenue but it's not in top 100 US companies either.
- xoxoy 6y agonot sure what that has to do with my response. the claim was that “small” companies can multiply their valuation more easily.
- baybal2 6y agoBecause their owners believe it is their last chance?
- TuringNYC 6y agoUnprofitable can be good or bad or unknown: Bad: they dont have product market fit and cannot price at a level that is profitable Unknown: they do have product market fit and can likely price at a level that is profitable, but choose to underprice to capture market share and grow Good: They are actually profitable but are re-investing all their profits into internal investment to become even more profitable in the future. example: Amazon for the last 20yrs
- coldcode 6y agoBut by definition if you invest profits forever you never make any; maybe if you wait long enough you own the entire market and can charge whatever you like then. Is that really actionable though? One stumble and your stock is almost worthless.
- cj 6y agoIf you stop reinvesting profits into R&D, the only other place to put your profit is paying out dividends to shareholders or doing things like buying back stock (which many companies start doing once they reach a point where shareholders will realize more value through dividends than they will from ROI on R&D).
- TuringNYC 6y agoIt is a choice nevertheless. As a business owner, you have the freedom to go this route. As a public company, you also have the freedom to go this route as long as the board/shareholders agree (as they did in Amazon's case.) If a business owner wants to re-invest for growth and shareholders agree I do not see an issue. Without that, we would never have Amazon, FB, MSFT, or almost any large company (whatever you think of these companies aside) As an Engineer, I think re-investment is awesome. Compare this to the old mentality of squeezing a company until it has no blood left (as Private Equity companies often do.) As long as the company is profitable and re-investing, this is a huge net value to society IMHO.
- mdorazio 6y ago"Almost one in five of these money-losing companies is up 100% or more this year. There are some huge gainers on this list including companies like Overstock.com (+1055%), Tesla (+429%), Peloton (+348%) and Moderna (+285%). But there are also plenty of big losers of these money-losing firms. More than one-quarter of these stocks are down 10% or more this year while almost 50 names have fallen 30% or more in 2020." So that explains it pretty well. You're basically making a VC shotgun portfolio out of the stocks with the exact same dynamics - the big winners pull the average way up and offset the large number of middling and poor performers. For a meaningful analysis, you would need to dig into the winning stocks specifically and ask why they're up so much.
- santa_boy 6y ago> For a meaningful analysis, you would need to dig into the winning stocks specifically and ask why they're up so much. IMHO rationalization of this is very random at best. Why is Zoom (up >600% YTD) really worth it? Most of the big tech cos. can replace Zoom overnight. I use Google Meet daily without the trivial bells-n-whistles that Zoom offers. Absolutely no adjustments needed! Jio in India (where I am from) would eat Zoom very quickly (https://bit.ly/3nSBuRy https://bit.ly/3nSBuRy) I don't mean to dampen the euphoria but seriously without $ backing, many of these companies are simply difficult to justify. (Valuations will revert to DCF over the long term. But then, in the long term there is no one really alive :-) ... dance along while the music is playing is the mantra ... ) I'd be happy to receive opposing views that are well explained.
- mdorazio 6y agoI don't disagree. In a lot of cases, like Zoom, there's a stupid amount of free capital floating around due to effectively-zero interest rates, and not many places with decent returns to invest it. So anything that gets hyped as a good place to put it (like tech stocks) gets blown out of proportion and underlying fundamentals don't really come into play. Basically, investors (and the market) aren't rational right now.
- f00zz 6y ago
- sharkweek 6y agoI don’t know much about the stock market outside of throwing any savings I can muster into a vanguard fund, but articles like this remind me of the scene from Silicon Valley where the Pied Piper team is talking about finding a revenue stream. Their investor, the Mark Cuban caricature, Russ Hanneman butts in and yells at them about the dangers of showing revenue and how it proves you might only be a 2x-er. "It's not about how much you earn. It's about what you're worth. And who is worth the most? Companies that lose money!" He goes on to argue that if you don’t show any revenue then the possibilities are left only to the imagination! Pre-revenue = maybe a 100x-er at some point! Obviously silly and over simplified, but I do think that there is truth in the humor. Once this company gets its act together, it could shoot to the moon! Edit: Here's a link to the scene: https://www.youtube.com/watch?v=BzAdXyPYKQo https://www.youtube.com/watch?v=BzAdXyPYKQo
- ralston3 6y agoAbsolutely hilarious scene. Made even more funny by how scarily accurate it is XD
- taneq 6y ago"It's the perfect play!" That show is so on point sometimes.
- dmarlow 6y ago> Their investor, the Mark Cuban caricature, Russ Hanneman I didn't know that's what they had intended. I never once thought that's what they were going for.
- exdsq 6y agoYeah I thought it was just a bro-VC type person rather than anyone specific
- sharkweek 6y agoI'm not sure if it was ever explicitly stated by the writers, but IIRC, Russ put "radio on the internet," while Mark Cuban first hit it big with broadcast.com. I believe they based him off of Mark's big personality too, mocking things like "three commas" and investing in a bunch of stinkers over the last 20 years.
- ethbr0 6y agoI said this in another thread, and I think it's apt here. If you have high growth, you can lose a lot of money and still have a good story. If you make some money, but don't have high growth, then you can't tell nearly as compelling of a story. Effectively, investors are assuming eventual profitability is inevitable, and measuring growth. The 90s showed that's fair... sometimes. But definitely lets pathological corporate liars with juiced metrics slip through too.
- shuckles 6y agoI’m not sure it’s about growth. Based on YCharts, it seems like Tesla’s revenue growth stalled after Sep 2018. https://ycharts.com/companies/TSLA/revenues https://ycharts.com/companies/TSLA/revenues
- Zanni 6y agoIt's hard to see in that chart because of the big peak in the 4th quarter of 2018, but year over year growth per quarter is generally improving. The annual revenue chart shows the trend more clearly: https://ycharts.com/companies/TSLA/revenues_annual https://ycharts.com/companies/TSLA/revenues_annual
- dustingetz 6y agoName a high growth company that grew to scale but didn't turn profitable? Uber? That still worked out
- ethbr0 6y agoPets.com https://en.m.wikipedia.org/wiki/Pets.com https://en.m.wikipedia.org/wiki/Pets.com
- dustingetz 6y agoMedium
- legulere 6y agoThere’s just too much money flowing around. Just the other day I read that Tim Cook managed to double both revenue and profits. Stock value increased more than five-fold. The stock market is bloated. It will be interesting how we will get out of that again.
- airstrike 6y ago>Almost one in five of these money-losing companies is up 100% or more this year. There are some huge gainers on this list including companies like Overstock.com (+1055%), Tesla (+429%), Peloton (+348%) and Moderna (+285%). Peloton was a great idea with equally good execution and everyone being stuck at home has only increased its value proposition. Moderna is one of the leading companies in the pursuit for a COVID-19 vaccine, at least allegedly so. Tesla is Tesla. EV megatrend yada yada I don't know the first thing about Overstock.com to be able to opine one way or another
- m1117 6y agoAlso I see the stock market as a train that will take me through the dark tunnel of the inflation caused by printing all the recent money.
- sunshinerag 6y agoThe market is jostling with too much magicked money?
- akiselev 6y agoThis analysis needs to exclude biotech companies like Moderna, otherwise it conflates high market risk companies that are burning money trying to become profitable with companies that are high on R&D risk and are practically forbidden from making money (from the general public) but are guaranteed an exit if the science works out (and will quickly fall to zero if it doesn't). Given the 5-10 year time frame for devices and 10-20 years for drugs and complex therapeutics, most successful biotech companies IPO after phase 1/2 trials when they have zero revenue (it's illegal for them to charge consumers for anything related to the product until it's approved). Pharmaceutical companies have the benefit of knowing "product-market fit" ahead of time so a successful phase 3 is all but guaranteed a multi-billion dollar acquisition (it even happens at phase 2 for promising candidates). This has been going on for decades with increasing frequency thanks to the pharma industry falling off the small molecule cliff and analyzing these companies in the same group as VC subsidized rideshare or whatever isn't going to yield the best results.
- jariel 6y agoIf they are growing rapidly then that would be the primary issue. Secondarily is a new kind of emotional injection from a wave of new retail investors. This happened in the .com when retail started in earnest with online trading. And of course 'a kind of inflation'. The Fed is printing money like no tommorow, there's more money chasing fewer deals, very low interest rates. See: home prices.
- m00dy 6y agoBecause of FED's QE
- nemo44x 6y agoThe SaaS business model is just such a growth machine. If you have limited churn, expansion with existing customers, and sustained high growth you're going to be making a lot of money down the road. There's just so much lifetime value from SaaS customers and although the initial revenue is low per customer, it snowballs over time as more and more customers are added and services expanded. $CRM is a prime example of this phenomena. It's also hard to use traditional metrics like EBITDA in a fast growing, expanding SaaS company. So much is based on future growth and revenues and getting over that hump to where the business becomes a raging cash geyser. Some will make it and some will not. But no one really knows who will make it and where they'll tap out today. For all we know many of these companies are unbelievably undervalued. Additionally, I think there's a belief that there will be consolidation and many of these SaaS companies will be acquired. This has happened to an extent. Hell, the Mulesoft acquisition looks like a bargain today.
- oregontechninja 6y agoThe volatility of the market makes for easy profits. Did an excercise on marketwatch in school one time. I traded random symbols that met my criteria and made a fat virtual profit. I kept it going after the experiment and realized the only reason I did well was because of the variability of that time for the market. I would kill to have some extra cash to invest right now/3 months ago, panicked laymen make investing easy.
- bumby 6y agoDid this work for a relatively long term? The general sentiment is lots of strategies work during bull markets but then get crushed by volatility in bear markets since the drawdown tends to be higher
- beervirus 6y agoWhen we're printing trillions of dollars, you gotta put your money somewhere or you'll get negative returns.
- snarf21 6y agoIt is very simple. There are two things happening here. One: the Fed has invested trillions buying everything under the sun (not just t-bills) to prop up the markets and make it look the economy is fine. Two: interest rates are being held artificially low by the Fed and have been for a while. So people are desperate for returns and the only place to get it is equities. It is a pyramid scheme and must pop someday. Really just depends on how/what/when the Fed does.
- dustingetz 6y agoUSA is all in, expect military to prevent the pop
- ComputerGuru 6y agoWhat will they do, put a gun to consumers’ heads to force them to buy exercise bikes and the latest iPhone models?
- toby 6y agoClose, but you're missing a step: create new money, give it to Americans so they can afford to buy exercise bikes, put a gun to the head of anyone who dares challenge the US dollar hegemony.
- randycupertino 6y agoDidn't Germany already try this exact method and fail following their post-WWI sanctions? They had to pay back something like $132 billion gold marks London Schedule of Payments required Germany to pay ~ $132 billion gold marks and issued a bunch of currency leading to hyerinflation? And resentment, populism and nationalism rose and things went pear shaped from there.
- newen 6y agoThey failed because they lost the war.
- o_class_star 6y agoIt's psychological, but it also goes from an understanding that profits, in the rigid economic sense, don't reliably exist. A profit is gain realized by buying things, recombining them using innovation, and selling at a favorable price. A true profit is something you make, again and again, and with diminishing returns because prices move and the gap closes, as with arbitrages. Rents, which are more reliable, are payments you collect because you own things. (You may use those things, or you may, using the more common sense of the word, rent those things out.) Most "profits" are actually just rents. Rents extracted because the company owns real estate, rents extracted because of brand presence, interest (which is a rent on money) through financing programs, rents extracted because workers' need for daily survival has them systematically underpricing their labor, and rents on political capital (favorable regulatory environment). Getting paid because you have a great idea is intermittent, and usually requires taking on a lot of risk, and risk is something established companies hate. Getting paid because you own something is easy-as-shit and forever reliable. Where does the car industry make the bulk of its gains? Not on selling the cars, but in financing. It's an evergreen business, so long as there is capitalism-- there will always be people who need money they don't have, and it will always be an easy business to collect the vig. Regular businesses eventually stop innovating-- they have plenty of smart people, but the bosses don't want to take risks because they're busy collecting personal rents by holding management positions, and obviously don't want to lose that-- and their "profits" converge to the rent roll on the resources they own. That's just how it works. Average equals mediocre, the latter used non-pejoratively. That said, it's not sexy to imagine that one is investing into companies that have become mere utilities, that will continue to collect rents on the resources they own (of which a person can buy a tiny fractional share of the ownership) but not really do anything interesting. These ultra-capitalist non-profits (non-profits-for-now) create the illusion that they're something different... that they're "rocket ship" companies run by people with supernatural talent and "vision", that they aren't rent-seekers using capital's native advantage over labor for reliable but unpulchritudinous gains... which is what all large companies are... but, instead, a kind of "new company" that is going to innovate moonshots and synergize us up a new century of prosperity, freedom, and magical puppies that never poop. Smart investors recognize that all of that is bullshit, and that these tech unicorns are just as exploitative as traditional companies (and, in fact, probably more so) but they also realize that dumber investors get the warm fuzzies and that there is therefore a premium.
- KirinDave 6y agoSo if I'm reading this right, the author feels that the reason these companies are so valuable is because it destroys the free market one customer at a time, selling lock ins that would crush a normal business to escape, and that will deliver long term value as a result of said destruction. I guess that makes sense.
- sdenton4 6y agoSee, the market is itself a commons, which we are obligated to destroy in our search for profit and pure, unadulterated freedom. (but mostly profit.)
- deleted 6y ago[deleted]
- omarhaneef 6y agoThe article quotes Ben Thompson (yes, from Stratechery) to explain why unprofitable stocks are performing well. It is basically what you might expect (they are re-investing profits in growth). For those who wonder how you tell the good unprofitable companies from the bad unprofitable companies: typically you look at gross margins -- or unit economics. This is a little complicated to estimate for any sticky subscription company -- like a SaaS company -- you need to estimate the LTV and discount down to get the true gross margins. Thompson's point is that a sticky subscription company can have enormous LTV.
- manigandham 6y agoThe stock market is not rational, and it never has been, and 2020 is completely unprecedented with many overriding factors. Interest rates have fallen so the equities market is the only place for returns. Meanwhile the Fed has promised to backstop and keep spending for years if necessary. Add in record amounts of trading from retail investors to institutional funds riding the volatility craze, especially the options market which has outpaced the underlying stock in for several companies, and there's an incredible amount of support for this bubble.
- hitpointdrew 6y agoThe stock market price != value of the company. Stock market price == PERCEIVED value of a company. All the stock market does is try and find a equilibrium between parties that want to sell a stock and parties that want to buy a stock. That is it. It doesn't do anything more. You could have a company that is bleeding money month-after-month, is foretasted to never make a profit ever, but if there are more parties (for whatever reason) that want to buy the stock than those who want to sell then the price will go up. The actual financial health of a company is utterly meaningless, the only thing that matters is what investors think of company.
- polote 6y ago> The stock market does price != value of the company. Stock market price == PERCEIVED value of a company. No it is not, it is the price some investors are willing to buy at, which when the market is rational and there is no bubble is probably the perceived value
- hitpointdrew 6y agoYou are arguing over semantics...we are saying the same thing. The price some investors are willing to buy it at, or you could say, the price some investors perceive to be valuable.
- ryansmccoy 6y agoAs a former equity analyst, I would say that it's probably better just to ignore this analysis then read too much into it. The performance of company's stock isn't based solely on whether the company reported a net income it's previous year; it's based on (imo) an ever fluctuating list of metrics, both controlled by the company (i.e. Return on Capital Invested, which net income is a component of) and not controlled by the company (i.e. cost for banks to borrow capital, future growth expectations, current market valuation).
- Mamady 6y ago"So the fear-mongering about companies with huge losses driving the stock market is misplaced" Um... no. It would be great if you would come back to this article in 2 years time and run the same analysis on the same companies. I suspect the statement above will be rather invalid.
- cameronbrown 6y agoMy guess is that companies dumping have an advantage over legit companies, and they're growing much quicker when nobody is spending on normal companies anymore.
- MattGaiser 6y agoDon't most of these companies stand to benefit enormously from long term changes people think the pandemic will bring? Telsa benefits from any environmentally stimulus. Peloton benefits if we all move to more rural areas than downtowns and instead use them over a gym. Moderna is a vaccine company. You are betting on them getting a big payout.
- sithlord 6y agoStocks are not supposed to necessarily value what a company is worth today, they are supposed to be speculative of what the company will be worth in the future.
- volgo 6y agoThis is a topic as old as time. I never get why people “complain” about what other people pay for things at a price they themself seem silly. It doesn’t impact you. It’s their money. If they feel they can have an advantage in the long term investing in companies at a high valuation, then sure Everything thinks what they’re building is worth a lot of money but get jealous when they see high valuations from others :)
- wtracy 6y agoThe possibility that a lot of that investment might be coming from pension funds or from government-insured banks is concerning.
- munificent 6y agoI'm not a business person so I'm mostly using my extrecatory organ for vocalization here, but... One way to interpret this is that people are betting that losing companies are spending that money acquiring a resource that they can use to generate profit later. The obvious example is growing a giant userbase that will then stick with your product over time. Or it could be building up a bunch of infrastructure to reach a neccesary economy of scale. Hell, it could just be straight up paying lobbyists to buy politicians and do regulatory capture. The implication from all of this, then, is that these businesses are directly aiming for and/or creating inefficient markets. In an efficient market, it's easy for participants to enter and exit, startup costs are low, and consumers can easily switch products. That means there should be nothing a losing company can buy today that would prevent a future competitor from eating their lunch a few years from now. The fact that the market rewards losing company shows that there are things companies can buy now that stifle competition and reduce market efficiency in the future. These companies are spending money today to produce a worse market for consumers a few years from now. That doesn't sound like something we should be thrilled about.
- trixie_ 6y agoEveryone thinks the stock market is crazy. The government is crazy - printing trillions of dollars this year, plans to print trillions more. The currency is will be devalued, inflation will happen. Investors see that and are getting out of cash and into stocks/crypto/property. So is the market really up, or is it just the outlook on the dollar is down?
- bumby 6y agoI'm not sure the recent evidence bears out this point. If you look at the strength of the dollar, it's actually UP since the ultra-low interest rates that started after the financial crises. Rampant inflation hasn't happened either. I'm not smart enough to know if this is just a looming bow-wave or that the previous assumptions don't hold.
- pashamur 6y agoUp compared to what? That's the key. The money printing is roughly synced between central banks (Europe is actually printing more), so the dollar is up relative to other currencies (since other countries have external debts in dollars and have a need for dollars). If you look at dollars versus assets, gold, bitcoin, real estate - it's pretty clear that the dollar has lost significantly (it's just not obvious because all physical currency has depreciated in tandem) The inflation that is happening is not happening in daily commodities - it's happening in the capital markets instead.
- bumby 6y agoYes, good point. It was implied that the dollar is up compared to other currencies. I'm not sure gold, bitcoin, and real estate are great comparisons because they are too volatile to use as a real currency benchmark. Real-estate and gold have intrinsic value, I'm not sure how to divorce that for an apples-to-apples comparison to fiat currency. >The inflation that is happening is not happening in daily commodities - it's happening in the capital markets instead. I'm curious on your perspective with this. I was under the (maybe wrong) assumption that central banks are more concerned with controlling inflation for commodities...i.e., those things in the CPI rather than stocks. Do you think it should matter to them if capital markets are inflated? Real instability happens when people can't buy bread not when they can't buy $AAPL
- mandeepj 6y agoIt's the inflated demand created by retail traders sitting at home . Most of them invested in the companies highly active in the media like TSLA, ZOOM etc.
- bumby 6y agoPut another way (by Jim Cramer): For data warehouse plays, revenue growth + profit margin should be > 40. In other words, you can focus on high sales growth to plan for future profits, but if your sales growth is lagging you should be turning good profits now.
- snarkypixel 6y agoI wish more companies would separate the cost of _current revenue_ vs the growth investment of future revenue. I.e. Say it cost 30M to generate 100M, and 150M was invested in R&D and future sales. Even though it has negative revenue (100 - 150 - 30), the products that were sold are clearly profitable. Which imho is very different than saying the company is losing 80M a year.
- wtracy 6y agoI'm surprised that Overstock is simultaneously still running at a loss and is seeing rising share values. Every time I've tried to shop there, I've found a terrible selection, middling prices, and a mediocre UI. (To be fair, every e-commerce giant has a mediocre UI.) I see them casually mentioned in lists of "Amazon alternatives", but I've never once had someone recommend Overstock for a specific purchase. I don't think I've even talked to anyone who actually buys there. Are they growing gangbusters in some niche I'm not aware of?
- ac29 6y agoOverstock is not running at a loss (anymore). They doubled their revenue year over year and went from losing money to making money. I imagine that is why their stock is up, though I couldn't comment on why its up by 1000%. https://www.marketwatch.com/investing/stock/ostk/financials/income/quarter https://www.marketwatch.com/investing/stock/ostk/financials/...
- pashamur 6y agoThey've also heavily pivoted into tech in the past several years I think: https://money.cnn.com/2018/08/10/technology/overstock-blockchain-bitcoin-investment-earnings/index.html https://money.cnn.com/2018/08/10/technology/overstock-blockc...
- LatteLazy 6y agoThis story comes up at least every week, plus more often if there is a stock crash, a big or techy IPO, the fed sneezes, or basically anything happens. The reasons are always the same: * the fed is printing money * you buy FUTURE cashflow/price not current ones * "profit" is taxed, so no company makes it if it can avoid it. That doesn't make their revenue is less than a expenses though (see also using share buy backs to avoid multiple levels of taxation). * its often better for companies to spend excess cash than to hand it over (and thus let the government take 20 to 60% of it) * idiots like buying shiney things and that includes shares sometimes * the market can remain wrong longer than you can afford to be right (see for instance the last 20 plus years) * if something has dropped 50% then gone up 20%, you'll hear that it's up 20%! In a pandemic/financial crisis/recession/whatever. Not that it's actually down 40% (that's right, 40% not 30%, that's how percentages work).
- ianai 6y agoWonder what the USG including the Fed do after the election. Could get very dark fast.
- LatteLazy 6y agoI have zero faith in my predictions but... I don't think the free money era will end before the demographics change and boomers stop deciding every election. Until then any government that let's asset prices fall (or even fail to rise fast enough) is toast...
- Causality1 6y agoBecause the stock market is only secondarily connected to reality. It's primary function is as a mood ring for the collective mass of wealthy people. Wealthy people get a fetish for something and stocks go up. Right now they have a fetish for companies that lose five times their revenue while growing 500 percent a year.
- sunstone 6y agoProfit is not a very useful parameter for assessing a young company in growth mode with a good product.