7 ms·

Google market cap has grown over 50% in the past six months. Nvidia was up nearly 70%. Tesla was in the same ballpark, I can't imagine why. Heck, Meta was up 35

Google market cap has grown over 50% in the past six months. Nvidia was up nearly 70%. Tesla was in the same ballpark, I can't imagine why. Heck, Meta was up 35%, for no conceivable reason. So the headline here should be probably less about a small 5% hiccup in that Bitcoin-like trajectory, and more about why the heck is so much money pouring into the sector - including Tesla and Facebook, which aren't on the forefront of anything right now.

philipov 1y ago
On the forefront of regulatory capture.
throwaway-0001 1y ago
Maybe m2 money? But still can’t justify that. https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL
smileson2 1y ago
People have no idea what to do with their money right now
- mjr00 1y ago
  Yep! The only thing anyone knows for "sure" is that cash is an absolutely terrible place to keep your money right now. Any kind of asset is better.
  - andrewmcwatters 1y ago
    This isn't true. You're all implicitly claiming that all assets return nominal value above inflation, which isn't even remotely true when we teach it to pimple-faced undergraduate students.
    - Pooge 1y ago
      This has been true ever since cash supply was controlled by central banks.
      - andrewmcwatters 1y ago
        This also isn't true.
        Pooge 1y ago
        Cash loses value every year. This has been true for every currency. We don't have late 20th century inflation but people who know basic personal finance do not want to hold too much cash right now.
        andrewmcwatters 1y ago
        Equities also lose and gain value. There's a reason to hold cash when it's preferrable to lose real, time and inflation-adjusted, value versus losing to speculative equities or other securities. But go ahead, downvote me since you and the rest seem to think any asset is better than cash. Which, of course, once again, isn't true. You can buy bonds with real coupon rates worse than inflation; you can buy speculative equities whose YoY return nets negative. But yeah, cash is bad, cash is bad. Buy assets no matter the value! Go buy Pokémon cards! Right? I mean you guys are so smart, why hold cash? That's basic personal finance! I bet you also like to tell people "don't time the market, it's time in the market," right? There's no such thing as the "Lost Decades," that's a spooky Halloween story. In fact, you're right, go invest in Keurig Dr. Pepper, or no no, how about Kraft Heinz. Those did so well compared to just holding cash. What about real estate, huh? How about AirBnB? That better enough than cash for you? Not a fan of real estate? How about Warner Bros Discovery? Yeah? That better than cash? You could have lost money constantly on GameStop, but wait, there's more, you can go still lose money on it today! Why hold cash?
        Pooge 1y ago
        > I bet you also like to tell people "don't time the market, it's time in the market," right? That's right. > In fact, you're right, go invest in Keurig Dr. Pepper, or no no, how about Kraft Heinz. Those did so well compared to just holding cash. You're either trolling me or don't know anything about modern personal finance. If you're willing to get out of your cave and open your worldview a little bit, I recommend reading the Bogleheads wiki. Your argument is also flawed, as cash still lost some of its value. As it always did. Also, comparing cash to investment in specific companies stock is an unfair comparison. USD vs S&P500 index is a fairer comparison. It's fine if you yourself prefer to hold cash for whatever personal reasons you have, but please stop talking nonsense. A comparison of any currency in the world vs a roughly diversified index would invalidate all your points.
    - otterley 1y ago
      Cash is not an investment. Cash is a wealth store.
      - immibis 1y ago
        When you get down into the details, they're all just "things you can own" and the categories like "investment" and "wealth store" start to look very made up.
      - sph 1y ago
        Cash is a medium of exchange, not a wealth store. What wealth do you store if it doesn’t even keep up with inflation?
        otterley 1y ago
        I didn't say it was a good wealth store. ;-) But yes, it is a medium of exchange, too.
  - oarla 1y ago
    If you have cash, it may be a good idea to buy in this small downturn. Though I expect there will be more buying opportunities in the coming year.
- skatingaway 1y ago
  Huh? The fundamentals have not changed. If you’re that lost then close Reddit and hire an RIA.
- immibis 1y ago
  Which is a sign the government has printed way too much money. What are they doing to fix it? Printing more... There's actually an imbalance going on - the government has printed way too much money towards the stock market, and way too little towards the basics of a stable society, which is why there are symptoms of too much money and too little money simultaneously.
pols45 1y ago
Simple. No one can predict where the next breakthrough will come from or what it will be, but everyone feels it will come. This is also not like the other bubbles. It feels more like working on nukes or CRISPR but without the barrier to entry and constraints on rate of change. Market loves fast feedback loops. They can actually feel and touch this stuff unlike other game changers.
- m_fayer 1y ago
  “This one is different” floating in through the window, great signal to get out before the pop.
- solumunus 1y ago
  Everyone FEELS it. I love LLMs but I don’t feel it.
seydor 1y ago
Bitcoin is the stable one now
- immibis 1y ago
  Two things can be unstable at once.
skizm 1y ago
Meta's last earnings absolutely ripped, their stock jumped 11%, and somehow the stock's P/E ratio went down. I honestly think the market sleeps on Meta. I guess they really hate them investing so much in wearables/AI/metaverse stuff, but they just make so much god damn money I truly think they don't know what to do with it.
deleted 1y ago
[deleted]
some_furry 1y ago
Have you read Cory Doctorow's take on this yet? https://pluralistic.net/2025/09/27/econopocalypse/#subprime-intelligence https://pluralistic.net/2025/09/27/econopocalypse/#subprime-...
- Karrot_Kream 1y ago
  I read that. So now what kind of financial positions should I take in response?
  - some_furry 1y ago
    I'm a cryptography nerd, not a finance guy. Why would you ask me for investment advice?
    - Karrot_Kream 1y ago
      I mean what was I supposed to glean from the article? It's all a bubble? I'm a bubble; I'll be dead in the end and then I won't be able to affect the world. Having an idea of the timescale of a bubble helps folks understand the world around them.
      - some_furry 1y ago
        Based on the AI-2027 grift, I expect a little more than a year at most.
        Karrot_Kream 1y ago
        tbh that's where I'm at too
riku_iki 1y ago
Google grew partially because got weak penalties in anti monopoly case
jsnell 1y ago
6 months seems like a carefully cherry-picked number there, it is basically middle of the the trough of the tariff-induced market collapse that started 7 months ago and had been recovered from 5 months ago. That explains about 20 percentage points. The USD is down about 10% this year. Anything USD-denominated needed to go up by 10% just to stay even in real terms. So you're looking at a 30%-ish baseline for that specific 6 month interval. That's basically where Meta (etc) are. Of the larger outliers: Nvidia continued growing at >50% YoY, and their largest customers announced increased capex spending plans. Google's valuation had been depressed by uncertainty from ongoing anti-trust cases. One of them got resolved (and the day the remedies were announced is exactly when Google's share price decoupled from Microsoft, Amazon and Meta). Tesla? I've got nothing.
- 827a 1y ago
  Tesla, because they are the closest company to having a nation-sized fleet of autonomous taxis earning them some amount of revenue. Their autonomous driving system is roughly on-par with Waymo, but requires significantly less hardware, is already installed and running on millions of cars shipped since 2023 (HW gen4), and they have an established path to subsidizing the capex cost by selling these cars to consumers, then taking a percentage of self driving revenue (in addition to any centralized Waymo-like strategy they may concurrently run, like their pilot program in Austin). This is a wicked combination that has tons of stairstep potential lasting decades, as they work with regulators (well, whatever regulators are left) and expand the technology into other domains like semis. In comparison: Waymo has awesome technology, but logistically, they open, like, a small subset of one new city every year. Tesla has the logistics; Waymo doesn't. And there's no third company in the west that's even close.
  - zht 1y ago
    Tesla’s FSD is on par with Waymo?
    - 827a 1y ago
      I've done three 500 mile trips with it this year, and on one of these trips I challenged myself to never disengage, except when within just a few meters of the superchargers, home, or the destination. It did it. And the other two, I probably disengaged only a couple times on the other trips, mostly for stylistic reasons ("I wouldn't drive in the left lane here, that's a bit aggressive" kind of stuff). All in all I have ~6,000 FSD miles this year I'd estimate. Day-to-day, every once in a while if the lane markers are faded or something it might take the wrong lane across intersections, but its supremely good at making mistakes safely and recovering. Its so good that its boring now. I show it to people and they're amazed for the first ten minutes, then they forget about it. "Wait, you weren't driving? That was the car?" It just works. I've literally fallen asleep, accidentally, for a very short time (it has attention monitoring, but its not good). There's an initial moment of panic when I woke up & realized that happened, but then I was like... why? That panic felt like a trauma relic my mind has held on to from driving other cars. In this car, there was zero risk. It was no different than the 500 mile zero-interaction journey I had done the month before. It doesn't need me in the drivers seat. The only thing it struggles with is when there's debris on the road, or potholes. It'll usually just hit it. But even this is improving; yesterday I noticed a squirrel running across the road, and the car very subtly applied the brakes, before the squirrel cleared the other side, and the car continued at its normal speed. It was exactly what I would have done; maybe the squirrel doubles-back, so you need to prep your speed to be in a place where you can brake. It might have, if the squirrel had decided to do this. I have no doubt they will iron these problems out, because a year ago the list of "situations it struggles with" would have been this entire post. But if you're not interacting with this technology every day, you have no idea. The future is here, its just not evenly distributed. But, these things have a way of happening slowly, then all at once.
Fade_Dance 1y ago
>why the heck is so much money pouring into the sector - including Tesla and Facebook The names you pulled out have Size factor in common, and with the modern market cap weighted index/futures dominated market, flows into Size factor have a close correlation with overall liquidity flows. That's a broad phrase, but if you're talking about the narrative over the past 6 months (most human readable market narratives are bunk, but some are sound) you mainly watched the system deleverage and then releverage, which constitutes a major flow of liquidity. With 7% daily real moves, extreme implied volatility, and more concrete geopolitical uncertainty, portfolio risk metrics from any angle light up and risk has to be taken down. Not just hedge funds and traders (although they exert significant influence), but the more broad equity space as well, such as say pension funds who are in portfolios that target a yearly volatility band (vol targeting), or trend followers (500 billion and highly levered), and of course regular people who for either emotional or other reasons can't take the heat. Since the tariff shock, realized and implied volatility have come down, which mechanically drives a bid from the vol-targeting world, and gives more buying power to any entity who has a volatility budget (and to some degree everyone does), and that forms trends which bring traders and trend followers back in, and of course allows the construction of new narratives which most humans always like to have before committing capital. The points of extremely high leverage and extremely sharp deleveraging (panic selling) are often excessive in nature. It's a cycle that repeats, in an ongoing auction and price discovery process that never ends. Better to just look at longer term averages if you want to strip those aspects out. But that does beg the question of why this cycle continues to persist, and the answer is quite simply that dynamically targeting exposure can be profitable even with the obvious drawbacks. Selling volatility makes money. Following trends also makes money, and in trend following most of the profit comes from the extreme moves that you would think are the most dangerous (ex: gold recently, or equities themselves - mechanical trend followers have been increasingly net long equities until exposure started coming down within the past few weeks). The recent selloff had about 150 billion in forced selling from realized and implied volatility exposed entities: "Taking a look at Nomura's estimated "Index Rebalancing Projection” proxy which is an aggregation of SPX Options Dealer positioning / Greeks hedging, Leveraged ETF rebalancing and Vol Control deallocation flows: -$88.9B for Spot ~-2% move (which nearly doubles to -$151.0B in a -3% slide... which is pretty much where the Nasdaq is right now)." (from Friday) Ex: The portfolio I run has a volatility selling component, and it's been cranking on that for months now with fine results. Typically as this goes on, human fallacies creep in. Look at incentives, which are usually defined in yearly terms, which leads to traders and portfolio managers feeling like they have "house money" to gives back when they have high profits somewhere. Then you also have the greed and fear of missing out that builds up as well. AI being "hot" and the gold narrative are headline stories now. The flows above can be modeled: https://ibb.co/zW3PNMYw https://ibb.co/zW3PNMYw. Also remember that modern markets are surprisingly illiquid, which effects both on the downside and the upside. Be careful about assigning a few shares trading at a price to the "price" of the entire bulk of shares. This especially applies to the Teslas of the world that you named, and many of the AI names. People like to extrapolate when they maybe shouldn't be. __________________________________________________________________________ You have some other topics you're bringing up. Some of it can see some pushback: I remember thinking Google was dirt cheap 4 months ago. The popular narrative was that AI was going to destroy Google Search, etc, but I thought it was fairly likely AI search blurbs would not be a catastrophe, and then of course Gemini/Google's in house AI prowess was almost entirely ignored despite fairly excellent execution, and more importantly Google Cloud growth was downplayed at the same time it was hyped up at every other cloud company (that's a spread that seemed unsustainable), and then finally YouTube growth and recent expectation beating aspects of the business were downplayed as well. (This was my biggest equity position if you couldn't tell, although it no longer is since the business seems more in line with peers now). Then you have some obvious statements that the market is making about currency debasement. Equity markets generally perform very strongly in nominal terms during inflationary periods, and many debasement trades like Gold are through the roof. Perhaps the market is just expecting further concentration of wealth at the top and more asset inflation, rather than goods inflation. Another angle of this is that bonds are not looking attractive to people, and there seems to be some desperation for alternatives (I'd say that explains some of the gold run, especially if you personify foreign central banks this way as well, which is arguably true).
gloryjulio 1y ago
Google was severely undervalued for quite a while. It's current pe is only less than 25. While other mag7 might have inflated valuation, google was undervalued for a long time. There are quite a lot people bet Google would bounce back and the risk was low
- immibis 1y ago
  As another comment pointed out, P/E 25 is still absolutely insane. Realistic ordinary numbers are more like... 5 - since that means with 100% of the company's earnings going to dividends, it would take you 5 years to break even. 100% of the company's earnings don't go to dividends, though, so probably 10 years or more. Which is about the longest that a company that pays the highest dividends it can could be expected to last. A P/E of 25 only makes sense if we expect Google to pentuple its earnings. Already one of the biggest companies on the planet, become five times as big? It seems preposterous.
  - Karrot_Kream 1y ago
    The P/E of Coca Cola is 22.96.
    - solumunus 1y ago
      What is your point? This seems completely irrelevant to the subject comment.
      - senko 1y ago
        It’s relevant to point out a regular nontech slowgrowing company like CocaCola has a PE of 20+, therefore the claim that a normal one is 5 is mistaken.
        immibis 1y ago
        I said insane, not abnormal. Insanity is often normal.

philipov 1y ago

On the forefront of regulatory capture.

throwaway-0001 1y ago

Maybe m2 money? But still can’t justify that. https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL

smileson2 1y ago

People have no idea what to do with their money right now

mjr00 1y ago
Yep! The only thing anyone knows for "sure" is that cash is an absolutely terrible place to keep your money right now. Any kind of asset is better.
- andrewmcwatters 1y ago
  This isn't true. You're all implicitly claiming that all assets return nominal value above inflation, which isn't even remotely true when we teach it to pimple-faced undergraduate students.
  - Pooge 1y ago
    This has been true ever since cash supply was controlled by central banks.
    - andrewmcwatters 1y ago
      This also isn't true.
      - Pooge 1y ago
        Cash loses value every year. This has been true for every currency. We don't have late 20th century inflation but people who know basic personal finance do not want to hold too much cash right now.
        andrewmcwatters 1y ago
        Equities also lose and gain value. There's a reason to hold cash when it's preferrable to lose real, time and inflation-adjusted, value versus losing to speculative equities or other securities. But go ahead, downvote me since you and the rest seem to think any asset is better than cash. Which, of course, once again, isn't true. You can buy bonds with real coupon rates worse than inflation; you can buy speculative equities whose YoY return nets negative. But yeah, cash is bad, cash is bad. Buy assets no matter the value! Go buy Pokémon cards! Right? I mean you guys are so smart, why hold cash? That's basic personal finance! I bet you also like to tell people "don't time the market, it's time in the market," right? There's no such thing as the "Lost Decades," that's a spooky Halloween story. In fact, you're right, go invest in Keurig Dr. Pepper, or no no, how about Kraft Heinz. Those did so well compared to just holding cash. What about real estate, huh? How about AirBnB? That better enough than cash for you? Not a fan of real estate? How about Warner Bros Discovery? Yeah? That better than cash? You could have lost money constantly on GameStop, but wait, there's more, you can go still lose money on it today! Why hold cash?
        Pooge 1y ago
        > I bet you also like to tell people "don't time the market, it's time in the market," right? That's right. > In fact, you're right, go invest in Keurig Dr. Pepper, or no no, how about Kraft Heinz. Those did so well compared to just holding cash. You're either trolling me or don't know anything about modern personal finance. If you're willing to get out of your cave and open your worldview a little bit, I recommend reading the Bogleheads wiki. Your argument is also flawed, as cash still lost some of its value. As it always did. Also, comparing cash to investment in specific companies stock is an unfair comparison. USD vs S&P500 index is a fairer comparison. It's fine if you yourself prefer to hold cash for whatever personal reasons you have, but please stop talking nonsense. A comparison of any currency in the world vs a roughly diversified index would invalidate all your points.
  - otterley 1y ago
    Cash is not an investment. Cash is a wealth store.
    - immibis 1y ago
      When you get down into the details, they're all just "things you can own" and the categories like "investment" and "wealth store" start to look very made up.
    - sph 1y ago
      Cash is a medium of exchange, not a wealth store. What wealth do you store if it doesn’t even keep up with inflation?
      - otterley 1y ago
        I didn't say it was a good wealth store. ;-) But yes, it is a medium of exchange, too.
- oarla 1y ago
  If you have cash, it may be a good idea to buy in this small downturn. Though I expect there will be more buying opportunities in the coming year.
skatingaway 1y ago
Huh? The fundamentals have not changed. If you’re that lost then close Reddit and hire an RIA.
immibis 1y ago
Which is a sign the government has printed way too much money. What are they doing to fix it? Printing more... There's actually an imbalance going on - the government has printed way too much money towards the stock market, and way too little towards the basics of a stable society, which is why there are symptoms of too much money and too little money simultaneously.

pols45 1y ago

Simple. No one can predict where the next breakthrough will come from or what it will be, but everyone feels it will come. This is also not like the other bubbles. It feels more like working on nukes or CRISPR but without the barrier to entry and constraints on rate of change. Market loves fast feedback loops. They can actually feel and touch this stuff unlike other game changers.

m_fayer 1y ago
“This one is different” floating in through the window, great signal to get out before the pop.
solumunus 1y ago
Everyone FEELS it. I love LLMs but I don’t feel it.

seydor 1y ago

Bitcoin is the stable one now

immibis 1y ago
Two things can be unstable at once.

skizm 1y ago

Meta's last earnings absolutely ripped, their stock jumped 11%, and somehow the stock's P/E ratio went down. I honestly think the market sleeps on Meta. I guess they really hate them investing so much in wearables/AI/metaverse stuff, but they just make so much god damn money I truly think they don't know what to do with it.

deleted 1y ago

[deleted]

some_furry 1y ago

Have you read Cory Doctorow's take on this yet? https://pluralistic.net/2025/09/27/econopocalypse/#subprime-intelligence https://pluralistic.net/2025/09/27/econopocalypse/#subprime-...

Karrot_Kream 1y ago
I read that. So now what kind of financial positions should I take in response?
- some_furry 1y ago
  I'm a cryptography nerd, not a finance guy. Why would you ask me for investment advice?
  - Karrot_Kream 1y ago
    I mean what was I supposed to glean from the article? It's all a bubble? I'm a bubble; I'll be dead in the end and then I won't be able to affect the world. Having an idea of the timescale of a bubble helps folks understand the world around them.
    - some_furry 1y ago
      Based on the AI-2027 grift, I expect a little more than a year at most.
      - Karrot_Kream 1y ago
        tbh that's where I'm at too

riku_iki 1y ago

Google grew partially because got weak penalties in anti monopoly case

jsnell 1y ago

6 months seems like a carefully cherry-picked number there, it is basically middle of the the trough of the tariff-induced market collapse that started 7 months ago and had been recovered from 5 months ago. That explains about 20 percentage points. The USD is down about 10% this year. Anything USD-denominated needed to go up by 10% just to stay even in real terms. So you're looking at a 30%-ish baseline for that specific 6 month interval. That's basically where Meta (etc) are. Of the larger outliers: Nvidia continued growing at >50% YoY, and their largest customers announced increased capex spending plans. Google's valuation had been depressed by uncertainty from ongoing anti-trust cases. One of them got resolved (and the day the remedies were announced is exactly when Google's share price decoupled from Microsoft, Amazon and Meta). Tesla? I've got nothing.

827a 1y ago
Tesla, because they are the closest company to having a nation-sized fleet of autonomous taxis earning them some amount of revenue. Their autonomous driving system is roughly on-par with Waymo, but requires significantly less hardware, is already installed and running on millions of cars shipped since 2023 (HW gen4), and they have an established path to subsidizing the capex cost by selling these cars to consumers, then taking a percentage of self driving revenue (in addition to any centralized Waymo-like strategy they may concurrently run, like their pilot program in Austin). This is a wicked combination that has tons of stairstep potential lasting decades, as they work with regulators (well, whatever regulators are left) and expand the technology into other domains like semis. In comparison: Waymo has awesome technology, but logistically, they open, like, a small subset of one new city every year. Tesla has the logistics; Waymo doesn't. And there's no third company in the west that's even close.
- zht 1y ago
  Tesla’s FSD is on par with Waymo?
  - 827a 1y ago
    I've done three 500 mile trips with it this year, and on one of these trips I challenged myself to never disengage, except when within just a few meters of the superchargers, home, or the destination. It did it. And the other two, I probably disengaged only a couple times on the other trips, mostly for stylistic reasons ("I wouldn't drive in the left lane here, that's a bit aggressive" kind of stuff). All in all I have ~6,000 FSD miles this year I'd estimate. Day-to-day, every once in a while if the lane markers are faded or something it might take the wrong lane across intersections, but its supremely good at making mistakes safely and recovering. Its so good that its boring now. I show it to people and they're amazed for the first ten minutes, then they forget about it. "Wait, you weren't driving? That was the car?" It just works. I've literally fallen asleep, accidentally, for a very short time (it has attention monitoring, but its not good). There's an initial moment of panic when I woke up & realized that happened, but then I was like... why? That panic felt like a trauma relic my mind has held on to from driving other cars. In this car, there was zero risk. It was no different than the 500 mile zero-interaction journey I had done the month before. It doesn't need me in the drivers seat. The only thing it struggles with is when there's debris on the road, or potholes. It'll usually just hit it. But even this is improving; yesterday I noticed a squirrel running across the road, and the car very subtly applied the brakes, before the squirrel cleared the other side, and the car continued at its normal speed. It was exactly what I would have done; maybe the squirrel doubles-back, so you need to prep your speed to be in a place where you can brake. It might have, if the squirrel had decided to do this. I have no doubt they will iron these problems out, because a year ago the list of "situations it struggles with" would have been this entire post. But if you're not interacting with this technology every day, you have no idea. The future is here, its just not evenly distributed. But, these things have a way of happening slowly, then all at once.

Fade_Dance 1y ago

>why the heck is so much money pouring into the sector - including Tesla and Facebook The names you pulled out have Size factor in common, and with the modern market cap weighted index/futures dominated market, flows into Size factor have a close correlation with overall liquidity flows. That's a broad phrase, but if you're talking about the narrative over the past 6 months (most human readable market narratives are bunk, but some are sound) you mainly watched the system deleverage and then releverage, which constitutes a major flow of liquidity. With 7% daily real moves, extreme implied volatility, and more concrete geopolitical uncertainty, portfolio risk metrics from any angle light up and risk has to be taken down. Not just hedge funds and traders (although they exert significant influence), but the more broad equity space as well, such as say pension funds who are in portfolios that target a yearly volatility band (vol targeting), or trend followers (500 billion and highly levered), and of course regular people who for either emotional or other reasons can't take the heat. Since the tariff shock, realized and implied volatility have come down, which mechanically drives a bid from the vol-targeting world, and gives more buying power to any entity who has a volatility budget (and to some degree everyone does), and that forms trends which bring traders and trend followers back in, and of course allows the construction of new narratives which most humans always like to have before committing capital. The points of extremely high leverage and extremely sharp deleveraging (panic selling) are often excessive in nature. It's a cycle that repeats, in an ongoing auction and price discovery process that never ends. Better to just look at longer term averages if you want to strip those aspects out. But that does beg the question of why this cycle continues to persist, and the answer is quite simply that dynamically targeting exposure can be profitable even with the obvious drawbacks. Selling volatility makes money. Following trends also makes money, and in trend following most of the profit comes from the extreme moves that you would think are the most dangerous (ex: gold recently, or equities themselves - mechanical trend followers have been increasingly net long equities until exposure started coming down within the past few weeks). The recent selloff had about 150 billion in forced selling from realized and implied volatility exposed entities: "Taking a look at Nomura's estimated "Index Rebalancing Projection” proxy which is an aggregation of SPX Options Dealer positioning / Greeks hedging, Leveraged ETF rebalancing and Vol Control deallocation flows: -$88.9B for Spot ~-2% move (which nearly doubles to -$151.0B in a -3% slide... which is pretty much where the Nasdaq is right now)." (from Friday) Ex: The portfolio I run has a volatility selling component, and it's been cranking on that for months now with fine results. Typically as this goes on, human fallacies creep in. Look at incentives, which are usually defined in yearly terms, which leads to traders and portfolio managers feeling like they have "house money" to gives back when they have high profits somewhere. Then you also have the greed and fear of missing out that builds up as well. AI being "hot" and the gold narrative are headline stories now. The flows above can be modeled: https://ibb.co/zW3PNMYw https://ibb.co/zW3PNMYw. Also remember that modern markets are surprisingly illiquid, which effects both on the downside and the upside. Be careful about assigning a few shares trading at a price to the "price" of the entire bulk of shares. This especially applies to the Teslas of the world that you named, and many of the AI names. People like to extrapolate when they maybe shouldn't be. __________________________________________________________________________ You have some other topics you're bringing up. Some of it can see some pushback: I remember thinking Google was dirt cheap 4 months ago. The popular narrative was that AI was going to destroy Google Search, etc, but I thought it was fairly likely AI search blurbs would not be a catastrophe, and then of course Gemini/Google's in house AI prowess was almost entirely ignored despite fairly excellent execution, and more importantly Google Cloud growth was downplayed at the same time it was hyped up at every other cloud company (that's a spread that seemed unsustainable), and then finally YouTube growth and recent expectation beating aspects of the business were downplayed as well. (This was my biggest equity position if you couldn't tell, although it no longer is since the business seems more in line with peers now). Then you have some obvious statements that the market is making about currency debasement. Equity markets generally perform very strongly in nominal terms during inflationary periods, and many debasement trades like Gold are through the roof. Perhaps the market is just expecting further concentration of wealth at the top and more asset inflation, rather than goods inflation. Another angle of this is that bonds are not looking attractive to people, and there seems to be some desperation for alternatives (I'd say that explains some of the gold run, especially if you personify foreign central banks this way as well, which is arguably true).

gloryjulio 1y ago

Google was severely undervalued for quite a while. It's current pe is only less than 25. While other mag7 might have inflated valuation, google was undervalued for a long time. There are quite a lot people bet Google would bounce back and the risk was low

immibis 1y ago
As another comment pointed out, P/E 25 is still absolutely insane. Realistic ordinary numbers are more like... 5 - since that means with 100% of the company's earnings going to dividends, it would take you 5 years to break even. 100% of the company's earnings don't go to dividends, though, so probably 10 years or more. Which is about the longest that a company that pays the highest dividends it can could be expected to last. A P/E of 25 only makes sense if we expect Google to pentuple its earnings. Already one of the biggest companies on the planet, become five times as big? It seems preposterous.
- Karrot_Kream 1y ago
  The P/E of Coca Cola is 22.96.
  - solumunus 1y ago
    What is your point? This seems completely irrelevant to the subject comment.
    - senko 1y ago
      It’s relevant to point out a regular nontech slowgrowing company like CocaCola has a PE of 20+, therefore the claim that a normal one is 5 is mistaken.
      - immibis 1y ago
        I said insane, not abnormal. Insanity is often normal.