5 ms·

All of this has already happened. Just look at the stocks of all the pandemic companies. Peleton, Teledoc, Zoom, Docusign and on and on. Pretty much all down 80

by mgfist 4y ago

All of this has already happened. Just look at the stocks of all the pandemic companies. Peleton, Teledoc, Zoom, Docusign and on and on. Pretty much all down 80%+ from their highs.

roughly 4y ago
If anyone had any notion that the markets were efficient or rational in any way regarding the actual underlying value of the companies they purport to represent, I certainly hope that notion didn’t survive the pandemic - I’m not sure what world stocks were pricing in over the last two years, but it didn’t pass even a cursory smell test.
- adam_arthur 4y ago
  It's rational on the predication of completely absurd stories about growth trajectories. It's what happens when a bunch of dumb money comes into the market
- throwaway_4ever 4y ago
  It's still going on. Nikola, a vaporware company with absolutely 0 revenues burning $600m / year, is still "worth" $3b. HKD, a vaporware company, is being pump and dumped and is now "worth" $150b+, the size of Bank of America, despite being 50 employees with nothing of value. https://www.reddit.com/r/wallstreetbets/comments/wegalp/hkd_amtd_digital_is_now_the_35th_most_valuable/ https://www.reddit.com/r/wallstreetbets/comments/wegalp/hkd_...
- ProjectArcturis 4y ago
  The only way I can understand the Efficient Markets Hypothesis is as a way for academic economists to explain why they personally have not gotten rich trading stocks.
  - mikeyouse 4y ago
    If you’re actually curious about the EMH, you should really read something deeper than non-finance people paraphrasing it poorly.
    - zomglings 4y ago
      Can you please cite some of these references?
      - mikeyouse 4y ago
        It's a really approachable theory and contrary to what you'll read in tech message boards - doesn't remotely boil down to "the market can't be wrong". Burton Malkiel (economist most famous for writing "A Random Walk Down Wall St" and being a longtime advisor of Vanguard) has a paper talking about the early 2000's pushback. It gives a good summation / spells out some critiques / offers his reasons for disagreeing: https://www.princeton.edu/~ceps/workingpapers/91malkiel.pdf https://www.princeton.edu/~ceps/workingpapers/91malkiel.pdf
        zomglings 4y ago
        Thank you very much
    - smabie 4y ago
      Finance people (well, the ones that actually make money trading) don't put much stock in EMH either..
      - mikeyouse 4y ago
        I assume you mean they don’t put much stock in the strong EMH - Which is true, but the concept is the underpinning of most risk-weighted investing and some form of it (eg weak or semi-strong EMH) lines up nicely with why index funds outperform on a very broad basis. I’m trying to think of a good analogy to CS.. maybe “Good engineers don’t put much stock in artificial intelligence”
- fsckboy 4y ago
  the market is the most efficient place you can put your money, and the companies that underlie the market are the greatest stores of value with the best growth opportunities we know of, and the pandemic didn't change that. Dying to hear where else you suggest putting investments...?
  - lumost 4y ago
    If one believes the current market is bogus, then it is quite possible to move money into hard/sticky assets. Real estate is the prime example of this, as it’s in everyone’s interest that real estate not crash too hard. Similarly bonds Big question to ask if you are betting the market is bogus is whether the market will stay bogus while your “safe” asset stays flat.
    - fsckboy 4y ago
      of course you have alternatives to invest in, but whether the public markets are bogus or not is not a question of your personal belief.
  - cudgy 4y ago
    Yes, the market is very efficient at losing money as well by punishing foolish people that believe the market is only efficient at making money. Buy, buy, buy!
- s1artibartfast 4y ago
  If anything, the current situation is a demonstration of the opposite. The claim that markets are efficient and rational is based on long term price finding. This includes a lot of noise. If Peleton never makes a profit, the market will eventually find the correct price.
skrtskrt 4y ago
Any institution that invested in "home workout" stuff deserves to lose every dollar they put in, how could you not see that coming.
- alecbz 4y ago
  Would you say the same about working from home generally, which seems to have more staying power (even if we are seeing some return to office)? It seems not-crazy to me that someone would have thought that WFH was going to stick around post-COVID and thus also make people want to keep being able to work out from home.
  - skrtskrt 4y ago
    they’re quite different first and foremost, working out at home has always been available. If you prefer working out at home you were probably already doing it. Second, a lot of people enjoy a social aspect of gyms, or even just find it motivating to be around other people working out even if you don’t talk to them. You only have to spend a little time around fitness oriented folks to know workout at home was never going to stick I worked in a consumer goods VC during this time and we couldn’t believe anyone was touching these companies, most were just instagram-aesthetic branding on cheap machines
    - stockboss 4y ago
      as a bodybuilder for 20 years, i completely agree with you. working out at home has never had the same appeal to me or anyone else i knew who worked out as going to a gym. i got a peloton during covid isolation and it simply wasn't the same. i went to the gym the first day it opened and so did every other regular. i knew peloton wasn't going to continue thriving, however i do have to say they have very quality equipment so they'll probably continue to do okay.
      - deleted 4y ago
        [deleted]
      - 4y ago

by mgfist 4y ago

All of this has already happened. Just look at the stocks of all the pandemic companies. Peleton, Teledoc, Zoom, Docusign and on and on. Pretty much all down 80%+ from their highs.

roughly 4y ago

If anyone had any notion that the markets were efficient or rational in any way regarding the actual underlying value of the companies they purport to represent, I certainly hope that notion didn’t survive the pandemic - I’m not sure what world stocks were pricing in over the last two years, but it didn’t pass even a cursory smell test.

adam_arthur 4y ago
It's rational on the predication of completely absurd stories about growth trajectories. It's what happens when a bunch of dumb money comes into the market
throwaway_4ever 4y ago
It's still going on. Nikola, a vaporware company with absolutely 0 revenues burning $600m / year, is still "worth" $3b. HKD, a vaporware company, is being pump and dumped and is now "worth" $150b+, the size of Bank of America, despite being 50 employees with nothing of value. https://www.reddit.com/r/wallstreetbets/comments/wegalp/hkd_amtd_digital_is_now_the_35th_most_valuable/ https://www.reddit.com/r/wallstreetbets/comments/wegalp/hkd_...
ProjectArcturis 4y ago
The only way I can understand the Efficient Markets Hypothesis is as a way for academic economists to explain why they personally have not gotten rich trading stocks.
- mikeyouse 4y ago
  If you’re actually curious about the EMH, you should really read something deeper than non-finance people paraphrasing it poorly.
  - zomglings 4y ago
    Can you please cite some of these references?
    - mikeyouse 4y ago
      It's a really approachable theory and contrary to what you'll read in tech message boards - doesn't remotely boil down to "the market can't be wrong". Burton Malkiel (economist most famous for writing "A Random Walk Down Wall St" and being a longtime advisor of Vanguard) has a paper talking about the early 2000's pushback. It gives a good summation / spells out some critiques / offers his reasons for disagreeing: https://www.princeton.edu/~ceps/workingpapers/91malkiel.pdf https://www.princeton.edu/~ceps/workingpapers/91malkiel.pdf
      - zomglings 4y ago
        Thank you very much
  - smabie 4y ago
    Finance people (well, the ones that actually make money trading) don't put much stock in EMH either..
    - mikeyouse 4y ago
      I assume you mean they don’t put much stock in the strong EMH - Which is true, but the concept is the underpinning of most risk-weighted investing and some form of it (eg weak or semi-strong EMH) lines up nicely with why index funds outperform on a very broad basis. I’m trying to think of a good analogy to CS.. maybe “Good engineers don’t put much stock in artificial intelligence”
fsckboy 4y ago
the market is the most efficient place you can put your money, and the companies that underlie the market are the greatest stores of value with the best growth opportunities we know of, and the pandemic didn't change that. Dying to hear where else you suggest putting investments...?
- lumost 4y ago
  If one believes the current market is bogus, then it is quite possible to move money into hard/sticky assets. Real estate is the prime example of this, as it’s in everyone’s interest that real estate not crash too hard. Similarly bonds Big question to ask if you are betting the market is bogus is whether the market will stay bogus while your “safe” asset stays flat.
  - fsckboy 4y ago
    of course you have alternatives to invest in, but whether the public markets are bogus or not is not a question of your personal belief.
- cudgy 4y ago
  Yes, the market is very efficient at losing money as well by punishing foolish people that believe the market is only efficient at making money. Buy, buy, buy!
s1artibartfast 4y ago
If anything, the current situation is a demonstration of the opposite. The claim that markets are efficient and rational is based on long term price finding. This includes a lot of noise. If Peleton never makes a profit, the market will eventually find the correct price.

skrtskrt 4y ago

Any institution that invested in "home workout" stuff deserves to lose every dollar they put in, how could you not see that coming.

alecbz 4y ago
Would you say the same about working from home generally, which seems to have more staying power (even if we are seeing some return to office)? It seems not-crazy to me that someone would have thought that WFH was going to stick around post-COVID and thus also make people want to keep being able to work out from home.
- skrtskrt 4y ago
  they’re quite different first and foremost, working out at home has always been available. If you prefer working out at home you were probably already doing it. Second, a lot of people enjoy a social aspect of gyms, or even just find it motivating to be around other people working out even if you don’t talk to them. You only have to spend a little time around fitness oriented folks to know workout at home was never going to stick I worked in a consumer goods VC during this time and we couldn’t believe anyone was touching these companies, most were just instagram-aesthetic branding on cheap machines
  - stockboss 4y ago
    as a bodybuilder for 20 years, i completely agree with you. working out at home has never had the same appeal to me or anyone else i knew who worked out as going to a gym. i got a peloton during covid isolation and it simply wasn't the same. i went to the gym the first day it opened and so did every other regular. i knew peloton wasn't going to continue thriving, however i do have to say they have very quality equipment so they'll probably continue to do okay.
    - deleted 4y ago
      [deleted]
    - 4y ago