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Trading at a $110B valuation is surreal. But it’s hard to really disconnect execution from the insanity of our monetary system this year...trillions in dollars
by tempsy 6y ago
Trading at a $110B valuation is surreal.
But it’s hard to really disconnect execution from the insanity of our monetary system this year...trillions in dollars pumped into our economy, 0% rates, and a retail options frenzy has created the perfect environment for speculation on growthy tech stocks.
- bsimpson 6y ago42% of US Dollars didn't exist a year ago. If you're wondering why it's been such a bad year to be in cash despite the economy crumbling around you, it's because no one knows where else to put their money. Stocks and houses are being bought with inflated dollars.
- tempsy 6y agonot “inflated dollars” but a weakened dollar that naturally inflates assets
- jonny_eh 6y ago> Stocks and houses are being bought with inflated dollars How do we know the number of dollars is inflated? Maybe there were too few before?
- edgyquant 6y agoAre you sure about that? The current inflation rate for 2020 is 1.2%, which is almost half what's it been each of the last three years.
- bsimpson 6y agohttps://crystalbull.com/federal-reserve/quantitative-easing-effects-chart/ https://crystalbull.com/federal-reserve/quantitative-easing-...
- edgyquant 6y agoThank you for this!
- y04nn 6y agoProbably referring to the money supply M0, 3.32 in Nov 19 and 4.92 in Oct 2020. Prices have not inflated, but there is more money in circulation.
- secabeen 6y agoThe underlying idea here is that the velocity of money has dropped significantly; each dollar is changing hands less often than usual, so you need more money in the system to facilitate the same amount of commerce.
- xur17 6y agoWhat happens when the velocity of money picks back up?
- Bombthecat 6y agoIt depends where. If the money flows from one stock to another :no inflation. If it trickles down (very unlikely) we get inflation.
- tylerhou 6y agoThe Fed sells the assets it bought back to the banks it bought them from.
- dannyw 6y agoBut very slowly, very carefully, and perhaps never at all. See: Taper tantrum.
- tempsy 6y agohe is referring to the m1 money supply.
- epa 6y agoAlthough people think that the Fed buying bonds is "printing money", it is actually mistaken for liquidity events. If you provide cash to someone for an asset, the second party loses an asset and gains cash. Its a zero-sum trade, assuming the asset is worth its price (which with a corporate bond is undeniably true). Banks are the ones who create money, by creating loans to multiple parties and using leverage.
- tempsy 6y agothis is incorrect.
- epa 6y agoI highly recommend anyone who is interested in this topic listen to this talk: https://m.youtube.com/watch?v=14I1BdncYVo https://m.youtube.com/watch?v=14I1BdncYVo
- dannyw 6y agoBoth banks AND the Fed create money. The Fed this year has also directly made loans (from newly printed money) and purchased ETFs on the open market (from newly printed money). If you think the Fed isn’t doing anything when they QE, then ask yourself why they do it.
- actuator 6y agoI can understand Snowflake, Zoom etc. They benefited from things going remote and more software eating the world. AirBnB didn't benefit in any way. It just seems insane that we will see such a pop in their stock price. Or am I missing something here? Does remote work means more business for AirBnB properties in the future?
- ed312 6y agoRenting an entire ABNB is considered a "safe" travel option by many. E.g. you live in the city but are sick of your 4 walls, so you rent a cabin in the woods for a long weekend. I suspect whole-home ABNB bookings are through the roof, mainly in the summer.
- kilroy123 6y agoI agree with you. I was on Airbnb yesterday, looking for a cabin in the woods for the weekend. I couldn't find a good option, why? The good ones were already rented.
- raiyu 6y agoTravel will rebound and their last quarter bookings while down are recovering well. They also have more “rooms” and any hotel chain without any of the capex or infrastructure costs so it’sa fantastic model that is light on cash and creates tremendous scale. The pandemic forced them to cancel advertising, save a ton of cash, and realize that their brand is strong enough that advertising isn’t really needed in the traditional sense which improves their balance sheet for 2021 and 2022 and future years.
- baby 6y agoPersonally I’ve taken advantage of not having to be in the office to move out of SF and do airbnb hopping (stay a month here, a month there). It’s been great.
- myth_drannon 6y agoI used AirBnB for the first time this year to rent a cottage. The experience is stellar. For many years I used outdated sites like cottagesincanada.com or cottagesquebec.com, it was a nightmarish experience of looking for available cottage during the pandemic. I just gave up and used AirBnB. Sure I paid hundreds of dollars in fees and whatnot but it's just so much better experience (searching,reviews...). (And yeah, no hotels for travel so no Expedia in pandemic)