5 ms·

The first dominos are falling. The others will soon follow. When Big Tech makes up a sizable marketcap of the markets, and most folks are passively invested the

The first dominos are falling. The others will soon follow. When Big Tech makes up a sizable marketcap of the markets, and most folks are passively invested these days, it will hit everyone.

TechBro8615 4y ago
I think Cloudflare will be alright. That's where I'm investing my money.
- qeternity 4y ago
  I love Cloudflare, just want to own it cheaper. Fastly seems like a pretty obvious acquisition target at current price.
SQueeeeeL 4y ago
Let's go economic recession 2023, it'll be just like 2008 all over again!!! I hope the US Govt bails out Google and Facebook with billions of tax payer dollars this time while we all the voters realize there's no way to stop the bipartisan transfer of wealth to insecure financial ventures
- rafale 4y ago
  These companies are widely profitable. Overvalued != insolvent.
  - AviationAtom 4y ago
    Where do most of them get their money from? Advertisers. Who makes advertisers spend? Consumers. What happens when consumers are unemployed? ...
    - acchow 4y ago
      2008 hit the economy hard, but Google still managed to grow revenue by 31% (year ended Dec 31 2008) https://www.sec.gov/Archives/edgar/data/1288776/000119312509029448/d10k.htm https://www.sec.gov/Archives/edgar/data/1288776/000119312509... 2009 was tougher, where revenue growth slowed to 8.5% https://www.sec.gov/Archives/edgar/data/1288776/000119312510030774/d10k.htm https://www.sec.gov/Archives/edgar/data/1288776/000119312510... This all while unemployment rocketed upwards
      - borbulon 4y ago
        You're skipping the part where Google grew because they were opening new channels for growth - YouTube was only a few years old and growing, in 2008 Android had just been released and DoubleClick had just been bought. Now their growth depends on extracting more from their advertisers, it's an apples-to-oranges comparison.
        happyopossum 4y ago
        > because they were opening new channels for growth As they are today with GCP, security, user assurance, and everything under Alphabet not labeled Google. Yes, ad makes up a huge %age of revenue for Aplhabet, but it’s not the only dish at the buffet.
        AviationAtom 4y ago
        We haven't really seen a Dotcom 2.0 and I think we're due for it. COVID-era pumped a sizable amount of money into Big Tech.
      - cheriot 4y ago
        Last quarter Google and Meta ad revenue growth was roughly 2% and -4% respectively. If overall ad spend declines both of them will loose money. 2008/9 are not a good comparison because they were smaller companies and so much ad spend was moving from offline to online.
        Dylan16807 4y ago
        If google lost 40% of their revenue it would only kick them back to the same numbers they had in 2019 and 2020. Maybe Meta would have to stop spending a fortune on VR if revenue declines, but it would take a lot to hurt them.
    - kube-system 4y ago
      US unemployment is at a 50 year low. While 120,000 people may have been recently laid off at high profile tech companies, that's only 0.07% of the jobs market. (and many of them are highly employable and have new jobs)
      - AviationAtom 4y ago
        Indeed, but how is that number calculated? The output of an algorithm is only as good as the data you choose to incorporate into it. I think the picture is painted rosier than it is, but also I think we have ample room to fall still.
        kube-system 4y ago
        It's calculated like this: https://www.bls.gov/cps/cps_htgm.htm https://www.bls.gov/cps/cps_htgm.htm If you think it's wrong, there are other measures of household economic activity that can be used in conjunction. For instance, if people lose their jobs, they're going to spend less money, which hasn't happened yet (at least through Nov '22): https://www.bea.gov/news/2022/personal-income-and-outlays-november-2022 https://www.bea.gov/news/2022/personal-income-and-outlays-no...
        patrick451 4y ago
        Right, if we all became homeless and stopped looking for work, the unemployment rate would be 0%.
    - SoftTalker 4y ago
      The unemployed still buy things. Maybe different advertisers will be interested in their eyeballs, but there will still be an ad market for them.
tempsy 4y ago
Well cost cutting is bullish for stocks
- AviationAtom 4y ago
  There's going to be pain, but pain is good. Economic data just out showed that wage growth is slowing. For normal folks that sounds bad, for economists it means inflation is finally being tamed. What good is making more money if your money becomes worth less? The hard part is selling people on why stopping the status quo is actually a good thing. The crazy prices of cars and homes was a great example of mania that was unsustainable.
  - tempsy 4y ago
    the market is two steps ahead of economic data. if you believed inflation was rapidly coming down now it would not be the time to get bearish on stocks
    - AviationAtom 4y ago
      That's the problem, the market keeps thinking the Fed is bluffing. Inflation is not rapidly coming down, it is stubbornly beginning to ease.
      - reducesuffering 4y ago
        The inflation over the past 5 months is 1%, so 2.4% annualized.
      - burnte 4y ago
        No one thinks their bluffing, the market WANTS this, it depresses wages bringing costs down. Corporate profits are responsible for at least half of inflation, and wage growth is a good chunk of the other half. Profits are good reasons to raise prices, but wages isn't, and the market wants to put workers back in their place. They WANT a short recession.
      - 4y ago
WastingMyTime89 4y ago
It’s hard to guess. Big Tech has been riding high for a very long time in an environment saturated with cheap money. Still despite multiple crisis the rest of the economy is not doing so bad and reshoring has put manufacturing back into the limelight. We might see something more akin to a rebalance rather than a full on crash.
- AviationAtom 4y ago
  Looking at QQQs growth on a longer term chart is nothing short of staggering. I do feel a price correction is due. We saw it with Tesla and so too do I think we'll see it with QQQ.
  - deleted 4y ago
    [deleted]
frakkingcylons 4y ago
If you're so sure, you should capitalize on your insight and make some money in options.
- AviationAtom 4y ago
  There's money to be made day trading the volatility but I haven't the time, nor the experience, to predict each movement with reasonable certainty. I know the medium-term is down, and the long-term is up. If your outlook is long then you stay the course.
  - BoorishBears 4y ago
    Going from dramatic doomsaying about "falling dominoes" to tepid observations that are almost impossible to not have come true, is really quite the downgrade. There will be pain because there's always pain to come with the mind bogglingly good times? I mean I and so so so many others in tech have done well enough in the last 5 years or so to weather quite a bit to understate the tech market leading up to this. Sure there's going to be unlucky folks who enter the market at the tail end of the current round of musical chairs, but even the doomsayer admits the long-term is up so... The only people I feel bad for are those who missed out because they were too busy thumbing their noses down at the crowd.
    - AviationAtom 4y ago
      Did dominoes not fall in 2008? 2000? There is always a trigger action. The mania that has been pervasive for the past few years has not been good. A boom cycle of 14 years is too long to not be painful when it turns to bust. Speaking of musical chairs it feels like people want the bank to keep playing as the ship goes down. Will we recover from it? Almost certainly we will, but the pain inflicted on many during that time will not be fun. We have an new generation in the workforce that has really only known prosperity for as far back as their conscious memories stretch. If money was my profession then you'd best believe I'd be capitalizing on this. Look at Citadel's profits from last year, despite being initially caught off guard, and losing a fair amount, at the hands of folks from Wall Street Bets. I do wholeheartedly believe this downturn will be worse than 2008 and 2000, perhaps on the levels we saw during the 1970s and 1980s, or slightly worse. I don't believe people see this as even remotely possible and that, I believe, is dangerous.
roflyear 4y ago
Sure, but people have said similar to what you're saying for a few years.
BurningFrog 4y ago
This could be true. It could also not be. We'll see.

The first dominos are falling. The others will soon follow. When Big Tech makes up a sizable marketcap of the markets, and most folks are passively invested these days, it will hit everyone.

TechBro8615 4y ago

I think Cloudflare will be alright. That's where I'm investing my money.

qeternity 4y ago
I love Cloudflare, just want to own it cheaper. Fastly seems like a pretty obvious acquisition target at current price.

SQueeeeeL 4y ago

Let's go economic recession 2023, it'll be just like 2008 all over again!!! I hope the US Govt bails out Google and Facebook with billions of tax payer dollars this time while we all the voters realize there's no way to stop the bipartisan transfer of wealth to insecure financial ventures

rafale 4y ago
These companies are widely profitable. Overvalued != insolvent.
- AviationAtom 4y ago
  Where do most of them get their money from? Advertisers. Who makes advertisers spend? Consumers. What happens when consumers are unemployed? ...
  - acchow 4y ago
    2008 hit the economy hard, but Google still managed to grow revenue by 31% (year ended Dec 31 2008) https://www.sec.gov/Archives/edgar/data/1288776/000119312509029448/d10k.htm https://www.sec.gov/Archives/edgar/data/1288776/000119312509... 2009 was tougher, where revenue growth slowed to 8.5% https://www.sec.gov/Archives/edgar/data/1288776/000119312510030774/d10k.htm https://www.sec.gov/Archives/edgar/data/1288776/000119312510... This all while unemployment rocketed upwards
    - borbulon 4y ago
      You're skipping the part where Google grew because they were opening new channels for growth - YouTube was only a few years old and growing, in 2008 Android had just been released and DoubleClick had just been bought. Now their growth depends on extracting more from their advertisers, it's an apples-to-oranges comparison.
      - happyopossum 4y ago
        > because they were opening new channels for growth As they are today with GCP, security, user assurance, and everything under Alphabet not labeled Google. Yes, ad makes up a huge %age of revenue for Aplhabet, but it’s not the only dish at the buffet.
      - AviationAtom 4y ago
        We haven't really seen a Dotcom 2.0 and I think we're due for it. COVID-era pumped a sizable amount of money into Big Tech.
    - cheriot 4y ago
      Last quarter Google and Meta ad revenue growth was roughly 2% and -4% respectively. If overall ad spend declines both of them will loose money. 2008/9 are not a good comparison because they were smaller companies and so much ad spend was moving from offline to online.
      - Dylan16807 4y ago
        If google lost 40% of their revenue it would only kick them back to the same numbers they had in 2019 and 2020. Maybe Meta would have to stop spending a fortune on VR if revenue declines, but it would take a lot to hurt them.
  - kube-system 4y ago
    US unemployment is at a 50 year low. While 120,000 people may have been recently laid off at high profile tech companies, that's only 0.07% of the jobs market. (and many of them are highly employable and have new jobs)
    - AviationAtom 4y ago
      Indeed, but how is that number calculated? The output of an algorithm is only as good as the data you choose to incorporate into it. I think the picture is painted rosier than it is, but also I think we have ample room to fall still.
      - kube-system 4y ago
        It's calculated like this: https://www.bls.gov/cps/cps_htgm.htm https://www.bls.gov/cps/cps_htgm.htm If you think it's wrong, there are other measures of household economic activity that can be used in conjunction. For instance, if people lose their jobs, they're going to spend less money, which hasn't happened yet (at least through Nov '22): https://www.bea.gov/news/2022/personal-income-and-outlays-november-2022 https://www.bea.gov/news/2022/personal-income-and-outlays-no...
      - patrick451 4y ago
        Right, if we all became homeless and stopped looking for work, the unemployment rate would be 0%.
  - SoftTalker 4y ago
    The unemployed still buy things. Maybe different advertisers will be interested in their eyeballs, but there will still be an ad market for them.

tempsy 4y ago

Well cost cutting is bullish for stocks

AviationAtom 4y ago
There's going to be pain, but pain is good. Economic data just out showed that wage growth is slowing. For normal folks that sounds bad, for economists it means inflation is finally being tamed. What good is making more money if your money becomes worth less? The hard part is selling people on why stopping the status quo is actually a good thing. The crazy prices of cars and homes was a great example of mania that was unsustainable.
- tempsy 4y ago
  the market is two steps ahead of economic data. if you believed inflation was rapidly coming down now it would not be the time to get bearish on stocks
  - AviationAtom 4y ago
    That's the problem, the market keeps thinking the Fed is bluffing. Inflation is not rapidly coming down, it is stubbornly beginning to ease.
    - reducesuffering 4y ago
      The inflation over the past 5 months is 1%, so 2.4% annualized.
    - burnte 4y ago
      No one thinks their bluffing, the market WANTS this, it depresses wages bringing costs down. Corporate profits are responsible for at least half of inflation, and wage growth is a good chunk of the other half. Profits are good reasons to raise prices, but wages isn't, and the market wants to put workers back in their place. They WANT a short recession.
    - 4y ago

WastingMyTime89 4y ago

It’s hard to guess. Big Tech has been riding high for a very long time in an environment saturated with cheap money. Still despite multiple crisis the rest of the economy is not doing so bad and reshoring has put manufacturing back into the limelight. We might see something more akin to a rebalance rather than a full on crash.

AviationAtom 4y ago
Looking at QQQs growth on a longer term chart is nothing short of staggering. I do feel a price correction is due. We saw it with Tesla and so too do I think we'll see it with QQQ.
- deleted 4y ago
  [deleted]

frakkingcylons 4y ago

If you're so sure, you should capitalize on your insight and make some money in options.

AviationAtom 4y ago
There's money to be made day trading the volatility but I haven't the time, nor the experience, to predict each movement with reasonable certainty. I know the medium-term is down, and the long-term is up. If your outlook is long then you stay the course.
- BoorishBears 4y ago
  Going from dramatic doomsaying about "falling dominoes" to tepid observations that are almost impossible to not have come true, is really quite the downgrade. There will be pain because there's always pain to come with the mind bogglingly good times? I mean I and so so so many others in tech have done well enough in the last 5 years or so to weather quite a bit to understate the tech market leading up to this. Sure there's going to be unlucky folks who enter the market at the tail end of the current round of musical chairs, but even the doomsayer admits the long-term is up so... The only people I feel bad for are those who missed out because they were too busy thumbing their noses down at the crowd.
  - AviationAtom 4y ago
    Did dominoes not fall in 2008? 2000? There is always a trigger action. The mania that has been pervasive for the past few years has not been good. A boom cycle of 14 years is too long to not be painful when it turns to bust. Speaking of musical chairs it feels like people want the bank to keep playing as the ship goes down. Will we recover from it? Almost certainly we will, but the pain inflicted on many during that time will not be fun. We have an new generation in the workforce that has really only known prosperity for as far back as their conscious memories stretch. If money was my profession then you'd best believe I'd be capitalizing on this. Look at Citadel's profits from last year, despite being initially caught off guard, and losing a fair amount, at the hands of folks from Wall Street Bets. I do wholeheartedly believe this downturn will be worse than 2008 and 2000, perhaps on the levels we saw during the 1970s and 1980s, or slightly worse. I don't believe people see this as even remotely possible and that, I believe, is dangerous.

roflyear 4y ago

Sure, but people have said similar to what you're saying for a few years.

BurningFrog 4y ago

This could be true. It could also not be. We'll see.