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He doesn't seem to know what he is talking about. This "If your profit is not healthy, people sell your shares and then you get bought out by a private equity f

by Atropos 14y ago

He doesn't seem to know what he is talking about. This "If your profit is not healthy, people sell your shares and then you get bought out by a private equity firm" There are P/E ratios between "massively overvalued" and "massively undervalued" and there is no rule that you have to jump from one territory into the next - you can be overvalued and then adequately valued by the market as well... And there are many companies not paying dividends. In growing companies it can make sense. The Washington Post pays dividends and is down >50% for the last 5 years, while Amazon is up 166%... Who has the generous shareholders now?

Steko 14y ago
"He doesn't seem to know what he is talking about." HN has this sort of innate skepticism that is just adorable. I assure you Matt Yglesias knows what he is talking about. "There are P/E ratios between "massively overvalued" and "massively undervalued" and there is no rule that you have to jump from one territory into the next" He's making a general point about share price and profit not saying that unless you have giant profits you will be bought out. Low profits are normally punished by wall street, Amazon is an anomaly. "Who has the generous shareholders now?" Probably the company with a 3600 P/E ratio.
- Atropos 14y ago
  I'm not from the US, I have neither in depth knowledge who Yglesias or this magazine is. From his wikipedia profile it seems he studied philosophy and never worked in finance - which is exactly what I would have suspected... I'm not saying Amazon isn't overvalued. But to posit that, you have to make a comparison with a similar technology company and compare their respective growth prospects - of course nobody is buying Amazon stock because of their current profits. A statement like "The P/E is high, other companies have a lower P/E, therefore the shareholders are generous" does not have any value at all and does not reveal profound domain knowledge.
- graeme 14y ago
  'HN has this sort of innate skepticism that is just adorable. I assure you Matt Yglesias knows what he is talking about.' Yglesias is a bright guy, but he's routinely mocked in the political blogosphere for commenting on every issue under the sun, regardless of whether he knows what he's talking about. It produces a mix of cogent commentary and absolute nonsense, and if you're not familiar with the underlying issues it's very difficult to tell which is which. I can't cite any examples, because I stopped reading political blogs around 2009. But that was his rep amongst various bloggers and commentors back then.
  - Steko 14y ago
    "routinely mocked in the political blogosphere for commenting on every issue under the sun" My impression is the opposite. He's intensely disliked by the firedoglake set for being insufficiently liberal and by conservatives because they are batshit crazy and he said something insensitive after Breitbart died. As far as being mocked I don't think I've seen much outside of his basketball posts which can indeed be lawlworthy.
  - hyperpape 14y ago
    No, he drives some people crazy, and I personally think he'd be twice as good if he posted half as much, but he clearly knows a lot about a lot of things. Try this endorsement for example: http://marginalrevolution.com/marginalrevolution/2011/11/sumner-on-yglesias.html http://marginalrevolution.com/marginalrevolution/2011/11/sum...
- addlepate 14y ago
  HN has this sort of innate skepticism that is just adorable. I assure you Matt Yglesias knows what he is talking about. Right back atcha. "I assure you Matt Yglesias knows what he is talking about." Simply adorable!
- mikeash 14y ago
  Can you explain why Matt Yglesias would know what he's talking about, rather than just assuring us? You may be right, but some quick searching doesn't turn up any particular indication of expertise. Would be nice to know what causes you to say this.
- rm999 14y ago
  Ooof, very dangerous use of appeal to authority. Markets are probably one of the last places you want to build an argument on "that's what this expert said" because experts are always disagreeing with each other. That's sort of the point of a market: find a valuation that is above what some people think it should be and below what others think it should be. The value vs growth argument on amazon has been going in circles for years now. No one is saying anything new anymore.

by Atropos 14y ago

Steko 14y ago

"He doesn't seem to know what he is talking about." HN has this sort of innate skepticism that is just adorable. I assure you Matt Yglesias knows what he is talking about. "There are P/E ratios between "massively overvalued" and "massively undervalued" and there is no rule that you have to jump from one territory into the next" He's making a general point about share price and profit not saying that unless you have giant profits you will be bought out. Low profits are normally punished by wall street, Amazon is an anomaly. "Who has the generous shareholders now?" Probably the company with a 3600 P/E ratio.

Atropos 14y ago
I'm not from the US, I have neither in depth knowledge who Yglesias or this magazine is. From his wikipedia profile it seems he studied philosophy and never worked in finance - which is exactly what I would have suspected... I'm not saying Amazon isn't overvalued. But to posit that, you have to make a comparison with a similar technology company and compare their respective growth prospects - of course nobody is buying Amazon stock because of their current profits. A statement like "The P/E is high, other companies have a lower P/E, therefore the shareholders are generous" does not have any value at all and does not reveal profound domain knowledge.
graeme 14y ago
'HN has this sort of innate skepticism that is just adorable. I assure you Matt Yglesias knows what he is talking about.' Yglesias is a bright guy, but he's routinely mocked in the political blogosphere for commenting on every issue under the sun, regardless of whether he knows what he's talking about. It produces a mix of cogent commentary and absolute nonsense, and if you're not familiar with the underlying issues it's very difficult to tell which is which. I can't cite any examples, because I stopped reading political blogs around 2009. But that was his rep amongst various bloggers and commentors back then.
- Steko 14y ago
  "routinely mocked in the political blogosphere for commenting on every issue under the sun" My impression is the opposite. He's intensely disliked by the firedoglake set for being insufficiently liberal and by conservatives because they are batshit crazy and he said something insensitive after Breitbart died. As far as being mocked I don't think I've seen much outside of his basketball posts which can indeed be lawlworthy.
- hyperpape 14y ago
  No, he drives some people crazy, and I personally think he'd be twice as good if he posted half as much, but he clearly knows a lot about a lot of things. Try this endorsement for example: http://marginalrevolution.com/marginalrevolution/2011/11/sumner-on-yglesias.html http://marginalrevolution.com/marginalrevolution/2011/11/sum...
addlepate 14y ago
HN has this sort of innate skepticism that is just adorable. I assure you Matt Yglesias knows what he is talking about. Right back atcha. "I assure you Matt Yglesias knows what he is talking about." Simply adorable!
mikeash 14y ago
Can you explain why Matt Yglesias would know what he's talking about, rather than just assuring us? You may be right, but some quick searching doesn't turn up any particular indication of expertise. Would be nice to know what causes you to say this.
rm999 14y ago
Ooof, very dangerous use of appeal to authority. Markets are probably one of the last places you want to build an argument on "that's what this expert said" because experts are always disagreeing with each other. That's sort of the point of a market: find a valuation that is above what some people think it should be and below what others think it should be. The value vs growth argument on amazon has been going in circles for years now. No one is saying anything new anymore.