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“This time it’s different” Nothing has changed except central bank policy encouraging rampant speculation. The bull market won’t last forever and every generat

“This time it’s different” Nothing has changed except central bank policy encouraging rampant speculation. The bull market won’t last forever and every generation thinks the fundamentals don’t matter anymore, until suddenly they do. To be fair it is extremely hard to build wealth incrementally these days because of central bank policy, but it’s way better than yoloing life savings.

lotsofpulp 6y ago
Is it possible the bull market reflects the realities of big businesses, and tech businesses especially, reaping the rewards of automation and scalability and near zero marginal costs?
- camjohnson26 6y ago
  Anything is possible. That's probably true for Apple and Amazon but those are the exception. That's definitely not true for Uber, who lost 8.5 Billion (!) from operations in 2019: https://d18rn0p25nwr6d.cloudfront.net/CIK-0001543151/f272e038-1c89-456c-acf8-cea0cffe544d.pdf https://d18rn0p25nwr6d.cloudfront.net/CIK-0001543151/f272e03... Not true for WeWork either: https://www.sec.gov/Archives/edgar/data/1533523/000119312519220499/d781982ds1.htm#toc781982_10 https://www.sec.gov/Archives/edgar/data/1533523/000119312519... Maybe those are exceptions too but seems like the most hyped companies have not brought marginal costs near zero.
  - lotsofpulp 6y ago
    What does "most hyped" mean? Why does WeWork matter at all in this discussion? They got destroyed for having weak prospects when they tried to come near the public markets. I'm looking at this list of the S&P 500 companies, and they mostly have very solid earnings and fundamentals: https://fknol.com/list/market-cap-sp-500-index-companies.php https://fknol.com/list/market-cap-sp-500-index-companies.php I went through the top 100 companies, and the only one that is a "bet" is Tesla, except they have many, many cars on the road and have been delivering product that people want to buy. If anything, I'm even more bullish for all these huge companies, as absent any government action (which I doubt), who is going to take them on? They will continue to go vertical and eat each other's business, maybe. But that doesn't really affect you if you're holding the whole index fund ETF.
    - camjohnson26 6y ago
      Well the S&P is an index of the largest companies so they're going to be more solid than the rest of the market. WeWork was attempting an IPO and had a ton of hype, if that hype was because of improvements on marginal costs you would have seen it there. The S&P 500 PE ratio is objectively high right now. Whether it's high because of strong fundamentals or bubble effects is the million dollar question. https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-earnings-chart https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-ea...

lotsofpulp 6y ago

Is it possible the bull market reflects the realities of big businesses, and tech businesses especially, reaping the rewards of automation and scalability and near zero marginal costs?

camjohnson26 6y ago
Anything is possible. That's probably true for Apple and Amazon but those are the exception. That's definitely not true for Uber, who lost 8.5 Billion (!) from operations in 2019: https://d18rn0p25nwr6d.cloudfront.net/CIK-0001543151/f272e038-1c89-456c-acf8-cea0cffe544d.pdf https://d18rn0p25nwr6d.cloudfront.net/CIK-0001543151/f272e03... Not true for WeWork either: https://www.sec.gov/Archives/edgar/data/1533523/000119312519220499/d781982ds1.htm#toc781982_10 https://www.sec.gov/Archives/edgar/data/1533523/000119312519... Maybe those are exceptions too but seems like the most hyped companies have not brought marginal costs near zero.
- lotsofpulp 6y ago
  What does "most hyped" mean? Why does WeWork matter at all in this discussion? They got destroyed for having weak prospects when they tried to come near the public markets. I'm looking at this list of the S&P 500 companies, and they mostly have very solid earnings and fundamentals: https://fknol.com/list/market-cap-sp-500-index-companies.php https://fknol.com/list/market-cap-sp-500-index-companies.php I went through the top 100 companies, and the only one that is a "bet" is Tesla, except they have many, many cars on the road and have been delivering product that people want to buy. If anything, I'm even more bullish for all these huge companies, as absent any government action (which I doubt), who is going to take them on? They will continue to go vertical and eat each other's business, maybe. But that doesn't really affect you if you're holding the whole index fund ETF.
  - camjohnson26 6y ago
    Well the S&P is an index of the largest companies so they're going to be more solid than the rest of the market. WeWork was attempting an IPO and had a ton of hype, if that hype was because of improvements on marginal costs you would have seen it there. The S&P 500 PE ratio is objectively high right now. Whether it's high because of strong fundamentals or bubble effects is the million dollar question. https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-earnings-chart https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-ea...