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It's not just Etsy's stock that's up, but also the stock of Shopify, Amazon, Overstock, Walmart, Ebay, etc. And all the tech infra companies that support these

It's not just Etsy's stock that's up, but also the stock of Shopify, Amazon, Overstock, Walmart, Ebay, etc. And all the tech infra companies that support these ecommerce sites. There's a huge ecommerce bubble, and to a degree a tech bubble, being driven by all that disposable income that used to go to restaurants, travel, events, etc. instead being redirected to online shopping and online activity. Compounded by the money being printed by Fed which also doesn't have a lot of places to go. I doubt it's sustainable to expect that this is the new normal and nobody will want to go back to the way life was before. If that's the case, I can't understand how the PE ratios that imply someday the future value of these companies will be worth 100x-1000x multiples in 10-20 years are justified. But this has lead to an incredible transfer of wealth to a lot of tech companies. I just wonder when the party will end and we'll see a correction?

m3kw9 6y ago
If you are waiting for a correction to buy stocks you shouldn’t be in stocks the first place. It’s because you are trying to time the market to begin with, which is one of the biggest mistake mind set of all for investing or trading
- jameslk 6y ago
  No, more that I work in the ecommerce sector, have seen how crazy it's become as of recently, and I'm waiting for the other shoe to drop. But I agree generally that trying to time the market is a bad idea for most retail investors
  - da02 6y ago
    Can you give more examples of what you have seen from the inside that is not being reported by TV news? (I agree with you on the crazy PE ratios and FED manipulations. Something is going to happen to bring things back to reality.)
    - jameslk 6y ago
      I work with medium-size Shopify brands to assist on the development-side of things. When the pandemic started, a lot of ecommerce brands were clamping down on budgets. Shortly after the CARES act was passed, suddenly revenue for a lot of my clients started to skyrocket, especially those in the food industry (some were making what they made over the course of a year in a few months) but soon also to discretionary industries like apparel and beauty. Ever since, I've been seeing large-scale projects to agencies we work with being pushed through without hesitation and of course business has been growing at a much higher clip for my own company versus prior to CARES. I'm grateful for it, but at the same time I know this is at the expense of many small companies in the restaurant and travel space, and all the labor they employ too, so that's pretty depressing. And I don't think it's sustainable so I expect my own luck to turn around eventually. I don't think things will change much in the next 6 months though with another potential stimulus check on the horizon and at least until some of the state-level measures to reduce the spread of COVID are reversed (possibly with vaccines widely available?)
      - ketamine__ 6y ago
        Why do you think people won't continue their shopping habits online? Hasn't e-commerce grown over the past decade? Coronavirus may have sped up the growth.
        jameslk 6y ago
        Usually Black Friday/Cyber Monday (BFCM) or in-season traffic is when I see the most traffic for my clients. The new normal is BFCM traffic as a baseline, with the highest traffic 2-3x that. They've done nothing more than they've done in past years to earn that traffic. This isn't the usual growth of ecommerce, especially when its across an entire industry and very sudden. I do think the pandemic has set a new normal for ecommerce, but I very much doubt it will be at the levels we see today.
        hermanradtke 6y ago
        I also work in the e-commerce industry, specifically fashion. There are winners (home, lounge wear) and losers (dresses). I do not see this as a bubble. Will buying habits correct post-COVID? Sure, but factors have already been clamping down. If anything, you may see a boost in e-commerce in certain sectors.
thefourthchime 6y ago
Also the Fed set interest rates so low that you'll loose money having it in saving, causing everyone to invest their money, mostly the in the market. Some investors are so desperate for something to buy, they're making up new fake companies called "blank check IPOs". Fake companies that promise to make money some day. It's insane. For stuff like my 401k, I just buy into the market every month, I play a bit in the market personally, I got out of half of it a few months ago. I would love to buy TSLA, but the price is totally bonkers right now.
- grenoire 6y ago
  A very large majority of finance-savvy people I've been talking to over the course of the past few months have been willfully ignoring that: The markets are doing great now because there's barely a reason to not put your cash in equity! Dollar's devalued, stocks are pumping. Totally right with the blank-check IPOs.
askafriend 6y ago
You won't see a correction. What you're seeing is the world change before your eyes. Feel free to refer back to this comment in a year or two. E-commerce is sitting at 15-20% of all retail, it will almost certainly go to 50% this decade if not higher - it's inevitable. Value is more than revenue or profit and P/E ratios largely don't matter and haven't for a long time. Competitive positioning, long term leverage, and other things that you can't easily price matter just as much. This is about total and utter dominance in a sector - just look at the investments Shopify is making in delivering capital to small businesses or building out a fulfillment pipeline. Amazon's P/E ratio has been at or over 100 for the last 20 years. It was at 300 in 2012 (would you have bought then?). If you looked at that and that was the basis for not investing, you are using outdated views to invest. These companies are different and it's worth figuring out why.
- stinkytaco 6y ago
  I'm curious what you have figured out for "why?" When you say "value is more than revenue or profit" you are proposing an entirely post-capitalist way of thinking about the economy. I'm genuinely curious what you feel is different about Amazon, Shopify, etc. beyond a huge amount of debt, outside funding and interest rates that have made money cheap for more than a decade.
  - xapata 6y ago
    I think you're misinterpreting "value is more than revenue or profit." I read it as value is more than historical revenue or profit. It seemed that was the intent from the rest of that comment.
    - stinkytaco 6y ago
      I understand that. But my question is "what's the endgame?" From your response here I assume you feel there will come a point where Amazon will be wildly profitable? When and why?
      - 6y ago
JJMalina 6y ago
> Compounded by the money being printed by Fed which also doesn't have a lot of places to go. I generally agree with your comment about the potential for a structural change in where disposable income is going, but this statement isn't technically correct. I would check out this podcast for a great explanation of it: https://www.macrovoices.com/921-macrovoices-248-jeff-snider-qe-still-isn-t-money-printing-and-usd-still-isn-t-crashing https://www.macrovoices.com/921-macrovoices-248-jeff-snider-...
s1artibartfast 6y ago
>But this has lead to an incredible transfer of wealth to a lot of tech companies. How many of these tech companies are actually accumulating wealth due to high stock prices? When stocks change hands in the market, the company doesn't see any of the profit. The company revenue doesn't change unless they have treasury stock they are selling. As far as I know, very few are issuing new stock, aside from Tesla (which is genius).
quickthrowman 6y ago
> If that's the case, I can't understand how the PE ratios that imply someday the future value of these companies will be worth 100x-1000x multiples in 10-20 years are justified. Expected future growth. Some stocks get overpriced or underpriced, corrections to share price happen when information is taken in by the market. > There's a huge ecommerce bubble, and to a degree a tech bubble, being driven by all that disposable income that used to go to restaurants, travel, events, etc. instead being redirected to online shopping and online activity. Compounded by the money being printed by Fed which also doesn't have a lot of places to go. This is not a bubble. There is an expectation of 0% rates for the foreseeable future. The dollar has fallen in value since the March bottom and assets are being repriced higher to account for this. We aren’t even at February highs yet if you take the dollar decline into account, here’s an SPX chart adjusted for $DXY (SPX*DXY/100): https://tradingview.com/x/lyDLUewb/ https://tradingview.com/x/lyDLUewb/
xwdv 6y ago
Even if there is a correction, there will be a lot of people with fat bank accounts that didn’t have them before, simply because they took advantage of what they saw happening before their very eyes. IMO anyone who isn’t investing in the stock market right now is going to be on the wrong side of inequality. The dollar will depreciate, and though we will be seeing people make massive gains in 2020 and 2021, the buying power of those gains will not be the same as the buying power they would have in say 2019. There’s just too much money being printed out now and spent. If you’ve just been sitting in cash and have missed those gains you’ll be in a world of hurt when the day comes that your cash can’t really buy what it used to, while all the stock investors are out living their life as usual comfortable with inflated prices. You cannot afford to be sitting on the sidelines. If you’re extra paranoid, put your money where your mouth is and buy put options as insurance to protect yourself from downside risk, or if you’re happy with the gains you have now put a collar on your positions. But do not sit around doing nothing or reposting memes about how the Fed can’t keep printing money forever or how PE ratios are insane.
- jonp888 6y ago
  In Germany where I live, only 15% of the population own shares or indexes. I guess we're all really screwed then :)
- nemo44x 6y ago
  It is estimated that 22% of all dollars ever created have been created this year. [1] Couple that with continued lower interest rates and another likely stimulus this number will only go up.
vmception 6y ago
It's not a bubble if its driven by revenues and not just high interest debt lol. Also you might be interested in PE ratios alongside interest rates. You are so close to putting it together on your own, but keep detouring into permabear territory. As you point out, there is more money in the system and less places for it to go, so not only is the consumption piling into these services, people are also willing to pay a higher ratio for the shares. This means that PE ratios in isolation cannot tell you anything, a PE ratio to interest rate ratio will tell you everything. As long as confidence isn't shaken in the currency, more of that currency in the system will push interest rates lower. So all you are seeing is where the money goes.

m3kw9 6y ago

If you are waiting for a correction to buy stocks you shouldn’t be in stocks the first place. It’s because you are trying to time the market to begin with, which is one of the biggest mistake mind set of all for investing or trading

jameslk 6y ago
No, more that I work in the ecommerce sector, have seen how crazy it's become as of recently, and I'm waiting for the other shoe to drop. But I agree generally that trying to time the market is a bad idea for most retail investors
- da02 6y ago
  Can you give more examples of what you have seen from the inside that is not being reported by TV news? (I agree with you on the crazy PE ratios and FED manipulations. Something is going to happen to bring things back to reality.)
  - jameslk 6y ago
    I work with medium-size Shopify brands to assist on the development-side of things. When the pandemic started, a lot of ecommerce brands were clamping down on budgets. Shortly after the CARES act was passed, suddenly revenue for a lot of my clients started to skyrocket, especially those in the food industry (some were making what they made over the course of a year in a few months) but soon also to discretionary industries like apparel and beauty. Ever since, I've been seeing large-scale projects to agencies we work with being pushed through without hesitation and of course business has been growing at a much higher clip for my own company versus prior to CARES. I'm grateful for it, but at the same time I know this is at the expense of many small companies in the restaurant and travel space, and all the labor they employ too, so that's pretty depressing. And I don't think it's sustainable so I expect my own luck to turn around eventually. I don't think things will change much in the next 6 months though with another potential stimulus check on the horizon and at least until some of the state-level measures to reduce the spread of COVID are reversed (possibly with vaccines widely available?)
    - ketamine__ 6y ago
      Why do you think people won't continue their shopping habits online? Hasn't e-commerce grown over the past decade? Coronavirus may have sped up the growth.
      - jameslk 6y ago
        Usually Black Friday/Cyber Monday (BFCM) or in-season traffic is when I see the most traffic for my clients. The new normal is BFCM traffic as a baseline, with the highest traffic 2-3x that. They've done nothing more than they've done in past years to earn that traffic. This isn't the usual growth of ecommerce, especially when its across an entire industry and very sudden. I do think the pandemic has set a new normal for ecommerce, but I very much doubt it will be at the levels we see today.
        hermanradtke 6y ago
        I also work in the e-commerce industry, specifically fashion. There are winners (home, lounge wear) and losers (dresses). I do not see this as a bubble. Will buying habits correct post-COVID? Sure, but factors have already been clamping down. If anything, you may see a boost in e-commerce in certain sectors.

thefourthchime 6y ago

Also the Fed set interest rates so low that you'll loose money having it in saving, causing everyone to invest their money, mostly the in the market. Some investors are so desperate for something to buy, they're making up new fake companies called "blank check IPOs". Fake companies that promise to make money some day. It's insane. For stuff like my 401k, I just buy into the market every month, I play a bit in the market personally, I got out of half of it a few months ago. I would love to buy TSLA, but the price is totally bonkers right now.

grenoire 6y ago
A very large majority of finance-savvy people I've been talking to over the course of the past few months have been willfully ignoring that: The markets are doing great now because there's barely a reason to not put your cash in equity! Dollar's devalued, stocks are pumping. Totally right with the blank-check IPOs.

askafriend 6y ago

You won't see a correction. What you're seeing is the world change before your eyes. Feel free to refer back to this comment in a year or two. E-commerce is sitting at 15-20% of all retail, it will almost certainly go to 50% this decade if not higher - it's inevitable. Value is more than revenue or profit and P/E ratios largely don't matter and haven't for a long time. Competitive positioning, long term leverage, and other things that you can't easily price matter just as much. This is about total and utter dominance in a sector - just look at the investments Shopify is making in delivering capital to small businesses or building out a fulfillment pipeline. Amazon's P/E ratio has been at or over 100 for the last 20 years. It was at 300 in 2012 (would you have bought then?). If you looked at that and that was the basis for not investing, you are using outdated views to invest. These companies are different and it's worth figuring out why.

stinkytaco 6y ago
I'm curious what you have figured out for "why?" When you say "value is more than revenue or profit" you are proposing an entirely post-capitalist way of thinking about the economy. I'm genuinely curious what you feel is different about Amazon, Shopify, etc. beyond a huge amount of debt, outside funding and interest rates that have made money cheap for more than a decade.
- xapata 6y ago
  I think you're misinterpreting "value is more than revenue or profit." I read it as value is more than historical revenue or profit. It seemed that was the intent from the rest of that comment.
  - stinkytaco 6y ago
    I understand that. But my question is "what's the endgame?" From your response here I assume you feel there will come a point where Amazon will be wildly profitable? When and why?
    - 6y ago

JJMalina 6y ago

> Compounded by the money being printed by Fed which also doesn't have a lot of places to go. I generally agree with your comment about the potential for a structural change in where disposable income is going, but this statement isn't technically correct. I would check out this podcast for a great explanation of it: https://www.macrovoices.com/921-macrovoices-248-jeff-snider-qe-still-isn-t-money-printing-and-usd-still-isn-t-crashing https://www.macrovoices.com/921-macrovoices-248-jeff-snider-...

s1artibartfast 6y ago

>But this has lead to an incredible transfer of wealth to a lot of tech companies. How many of these tech companies are actually accumulating wealth due to high stock prices? When stocks change hands in the market, the company doesn't see any of the profit. The company revenue doesn't change unless they have treasury stock they are selling. As far as I know, very few are issuing new stock, aside from Tesla (which is genius).

quickthrowman 6y ago

> If that's the case, I can't understand how the PE ratios that imply someday the future value of these companies will be worth 100x-1000x multiples in 10-20 years are justified. Expected future growth. Some stocks get overpriced or underpriced, corrections to share price happen when information is taken in by the market. > There's a huge ecommerce bubble, and to a degree a tech bubble, being driven by all that disposable income that used to go to restaurants, travel, events, etc. instead being redirected to online shopping and online activity. Compounded by the money being printed by Fed which also doesn't have a lot of places to go. This is not a bubble. There is an expectation of 0% rates for the foreseeable future. The dollar has fallen in value since the March bottom and assets are being repriced higher to account for this. We aren’t even at February highs yet if you take the dollar decline into account, here’s an SPX chart adjusted for $DXY (SPX*DXY/100): https://tradingview.com/x/lyDLUewb/ https://tradingview.com/x/lyDLUewb/

xwdv 6y ago

Even if there is a correction, there will be a lot of people with fat bank accounts that didn’t have them before, simply because they took advantage of what they saw happening before their very eyes. IMO anyone who isn’t investing in the stock market right now is going to be on the wrong side of inequality. The dollar will depreciate, and though we will be seeing people make massive gains in 2020 and 2021, the buying power of those gains will not be the same as the buying power they would have in say 2019. There’s just too much money being printed out now and spent. If you’ve just been sitting in cash and have missed those gains you’ll be in a world of hurt when the day comes that your cash can’t really buy what it used to, while all the stock investors are out living their life as usual comfortable with inflated prices. You cannot afford to be sitting on the sidelines. If you’re extra paranoid, put your money where your mouth is and buy put options as insurance to protect yourself from downside risk, or if you’re happy with the gains you have now put a collar on your positions. But do not sit around doing nothing or reposting memes about how the Fed can’t keep printing money forever or how PE ratios are insane.

jonp888 6y ago
In Germany where I live, only 15% of the population own shares or indexes. I guess we're all really screwed then :)
nemo44x 6y ago
It is estimated that 22% of all dollars ever created have been created this year. [1] Couple that with continued lower interest rates and another likely stimulus this number will only go up.

vmception 6y ago

It's not a bubble if its driven by revenues and not just high interest debt lol. Also you might be interested in PE ratios alongside interest rates. You are so close to putting it together on your own, but keep detouring into permabear territory. As you point out, there is more money in the system and less places for it to go, so not only is the consumption piling into these services, people are also willing to pay a higher ratio for the shares. This means that PE ratios in isolation cannot tell you anything, a PE ratio to interest rate ratio will tell you everything. As long as confidence isn't shaken in the currency, more of that currency in the system will push interest rates lower. So all you are seeing is where the money goes.