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Honestly, I'm shocked by this comment. As if stock market is a perfect representation of a company performance, it is highly distorted\manipulated market. Sol

Honestly, I'm shocked by this comment. As if stock market is a perfect representation of a company performance, it is highly distorted\manipulated market. SolarWind is fucked, they have a massive drop in new customers, I work with dozens of companies that are now plan to completely abandon their suites(those things take time). Insurance is a trap. once you read the small letters, they don't fully cover the damage, usually only direct. Some have refused to pay due to some shady conditions that they insert into contracts to deceive customers(like any other insurance sector)

bencollier49 5y ago
If the stock market has distorted the price of SolarWinds that badly, as per your analysis, that's probably a sign that the stock market is massively overvaluing everything, and that we're headed for a gigantic crash. Which by coincidence is exactly what Michael Burry, the guy who predicted the 2008 housing crash, has been saying recently.
- d3nj4l 5y ago
  I've been hearing the "we're headed for a crash" thing with the same logic since at least mid-2019. Either we're not heading for a crash, or the market has become so irrational that it doesn't even matter any more, and we can build castles in the air forever.
  - ClumsyPilot 5y ago
    In 2005 it was clear to some thay the market was heading for a crash, but it can take years.
  - KirillPanov 5y ago
    Mid-2019? We can definitely build castles in the air for two years.
  - doopy1 5y ago
    I believe the market should in theory rise with inflation. Doesn't seem too crazy all things considered.
- rorykoehler 5y ago
  Isn't inflation above gains essentially a devaluing of the market? If the stock market goes slightly down and inflation ramps up significantly isn't that the same as a crash?
  - Bombthecat 5y ago
    The most expensive and valued stocks are "essentials" they dann just increase there price with inflation. I dont understand the problem with inflation..
    - betterunix2 5y ago
      Inflation is not a problem; unexpected changes in the rate of inflation are the problem. There are various reasons, but the most important is that a spike in the inflation rate leads to a spike in interest rates, which is generally harmful to businesses (loans are harder to repay, customers are less able to buy, etc.). There is also a second-order effect: rising interest rates reduce the value of long-dated bonds, which reduces the available investment capital (or worse, it can trigger margin calls and create a "contagion" effect).
    - rorykoehler 5y ago
      Yes that’s exactly my point. People look at absolute value of the stock market but what matters is the relative value to the dollar.
  - betterunix2 5y ago
    Correct, and that is why you should always analyze inflation-adjusted returns for any long-term investment.
- CyberRage 5y ago
  That's not what I've said. I'm not a financial expert by any means but I think the stock market has proved again and again that it is not reliable and can be manipulated easily. People short-squeezing stocks, shooting their "value" by 30x in 2 hours making them millionaires. Hedge funds manipulating stocks to meet their portfolios IPO's in billions of dollars for new, non-profitable startups just because of hype. when you look at the balance sheet it makes no sense. The market is volatile and inflated, it is as clear as day. Whether there will be a crash? that's beyond my level.
  - tluyben2 5y ago
    It will crash, predicting when is something else. I was correct in 2001 and 2008 but I was wrong in the past years as the market has been overheated for quite a while (I thought we would've crashed already) and both in stocks and recently in crypto, I have been hearing 'this is the new normal, all is different this time around'. Which is what people always say just before the carpet gets pulled.
- chmod775 5y ago
  > that's probably a sign that the stock market is massively overvaluing everything No it's not. The performance of stocks was always only weakly linked to actual company performance. There are countless examples of companies that are hardly profitable and not even a tenth the size of their competition, but are valued at twice the price of some of their competitors. It's mostly made-up prices created entirely on hype that often make less sense than the soccer trading card market.
genmud 5y ago
How is this comment shocking to you? I actually was using the stock price and public information on their earnings to make a point. The point being that no, these companies aren't losing customers in droves and if you look at their performance from a 3 or 5 year perspective, most breaches have had very little material impact on the companies. I disagree with you on SolarWinds being fucked... Sure, lots of folks are going to drop it, but they are closing new deals. The types of people that buy things like SolarWinds aren't buying the products because its a good technology. Not sure what insurance you have been looking at, but many of the larger businesses will essentially write out what they want covered (for example IR, infrastructure replacement due to hacking, business loss due to downtime, professional service implementation, support, PR assistance, etc.), and then the insurance company will come up with a price based on their calculations of risk. Sure, if an SMB goes and gets a "cyber policy" they are gonna be lots of technicalities, just like a mass market homeowners policy.

bencollier49 5y ago

If the stock market has distorted the price of SolarWinds that badly, as per your analysis, that's probably a sign that the stock market is massively overvaluing everything, and that we're headed for a gigantic crash. Which by coincidence is exactly what Michael Burry, the guy who predicted the 2008 housing crash, has been saying recently.

d3nj4l 5y ago
I've been hearing the "we're headed for a crash" thing with the same logic since at least mid-2019. Either we're not heading for a crash, or the market has become so irrational that it doesn't even matter any more, and we can build castles in the air forever.
- ClumsyPilot 5y ago
  In 2005 it was clear to some thay the market was heading for a crash, but it can take years.
- KirillPanov 5y ago
  Mid-2019? We can definitely build castles in the air for two years.
- doopy1 5y ago
  I believe the market should in theory rise with inflation. Doesn't seem too crazy all things considered.
rorykoehler 5y ago
Isn't inflation above gains essentially a devaluing of the market? If the stock market goes slightly down and inflation ramps up significantly isn't that the same as a crash?
- Bombthecat 5y ago
  The most expensive and valued stocks are "essentials" they dann just increase there price with inflation. I dont understand the problem with inflation..
  - betterunix2 5y ago
    Inflation is not a problem; unexpected changes in the rate of inflation are the problem. There are various reasons, but the most important is that a spike in the inflation rate leads to a spike in interest rates, which is generally harmful to businesses (loans are harder to repay, customers are less able to buy, etc.). There is also a second-order effect: rising interest rates reduce the value of long-dated bonds, which reduces the available investment capital (or worse, it can trigger margin calls and create a "contagion" effect).
  - rorykoehler 5y ago
    Yes that’s exactly my point. People look at absolute value of the stock market but what matters is the relative value to the dollar.
- betterunix2 5y ago
  Correct, and that is why you should always analyze inflation-adjusted returns for any long-term investment.
CyberRage 5y ago
That's not what I've said. I'm not a financial expert by any means but I think the stock market has proved again and again that it is not reliable and can be manipulated easily. People short-squeezing stocks, shooting their "value" by 30x in 2 hours making them millionaires. Hedge funds manipulating stocks to meet their portfolios IPO's in billions of dollars for new, non-profitable startups just because of hype. when you look at the balance sheet it makes no sense. The market is volatile and inflated, it is as clear as day. Whether there will be a crash? that's beyond my level.
- tluyben2 5y ago
  It will crash, predicting when is something else. I was correct in 2001 and 2008 but I was wrong in the past years as the market has been overheated for quite a while (I thought we would've crashed already) and both in stocks and recently in crypto, I have been hearing 'this is the new normal, all is different this time around'. Which is what people always say just before the carpet gets pulled.
chmod775 5y ago
> that's probably a sign that the stock market is massively overvaluing everything No it's not. The performance of stocks was always only weakly linked to actual company performance. There are countless examples of companies that are hardly profitable and not even a tenth the size of their competition, but are valued at twice the price of some of their competitors. It's mostly made-up prices created entirely on hype that often make less sense than the soccer trading card market.

genmud 5y ago

How is this comment shocking to you? I actually was using the stock price and public information on their earnings to make a point. The point being that no, these companies aren't losing customers in droves and if you look at their performance from a 3 or 5 year perspective, most breaches have had very little material impact on the companies. I disagree with you on SolarWinds being fucked... Sure, lots of folks are going to drop it, but they are closing new deals. The types of people that buy things like SolarWinds aren't buying the products because its a good technology. Not sure what insurance you have been looking at, but many of the larger businesses will essentially write out what they want covered (for example IR, infrastructure replacement due to hacking, business loss due to downtime, professional service implementation, support, PR assistance, etc.), and then the insurance company will come up with a price based on their calculations of risk. Sure, if an SMB goes and gets a "cyber policy" they are gonna be lots of technicalities, just like a mass market homeowners policy.