Posted on 11/26/2022 5:29:09 AM PST by Presbyterian Reporter
It seems like an eternity ago, but it’s just been a year.
At this time in 2021, the Nasdaq Composite had just peaked, doubling since the early days of the pandemic. Rivian’s blockbuster IPO was the latest in a record year for new issues. Hiring was booming and tech employees were frolicking in the high value of their stock options.
Twelve months later, the landscape is markedly different.
Not one of the 15 most valuable U.S. tech companies has generated positive returns in 2021. Microsoft has shed roughly $700 billion in market cap. Meta’s market cap has contracted by over 70% from its highs, wiping out over $600 billion in value this year.
In total, investors have lost roughly $7.4 trillion, based on the 12-month drop in the Nasdaq.
Fakebook is in the social control business. Twitter has been taken out of that business. I am tired of waking up every day to find that some 23 year old has now made some new "feature" the default on a Microsoft product and I have to spend a day figuring out how to turn Microsoft's Unhgeheuer [Kafka's huge cockroach] off again so that I can continue doing what I was doing.
LOL!! Spot on. I’d swear all Microsoft does on the new versions is move the buttons around. Some kid says, hey look boss….doesn’t this look better over here? Boss says yes and they move it causing millions to waste time trying to find the stupid thing.
Well, maybe the new "green" doesn't look as good on them as they thought it would.. :)
Don’t forget the housing bubble in the US and China.
No China GDP numbers for three straight quarters.
What’s the health of Bank of China, Bank of England, Credit Suisse, Deutsche Bank?…
How deep in housing are BlackRock, Vanguard, and REITs?
Cost of diesel?
Rail strike?
TSMC cutting output by 50%…
No China GDP numbers for three straight quarters.
Wow. There appears to some advantages to absolutist states. There are also some disadvantages.
The good news is that we aren’t telling you about the bad news.
That coupled with lockdowns are sure to be interesting.
My glass is now half empty.
It used to be half full…
Tech companies have very few hard assets, for example. Many of them have business models that can be replicated by competitors with very little startup costs. If you want to compete with Ford and Toyota you have to invest in billions of dollars in new plants and assembly equipment. If you want to compete with Twitter or Uber you just get a bunch of guys together with computers in your basement over a long holiday weekend and develop an identical app.
How much money do these companies even make, anyway? Amazon has never paid a dividend to its shareholders. Neither has Facebook.
What has happened here is that during a period of very low interest rates, the tech sector had attracted a lot of investment capital that had nowhere else to go. Now that rates are rising again, reality is starting to set in and investors are starting to see these tech companies for what they are: ephemeral ghosts that don’t have any value at all.
“What has happened here is that during a period of very low interest rates, the tech sector had attracted a lot of investment capital that had nowhere else to go. Now that rates are rising again, reality is starting to set in and investors are starting to see these tech companies for what they are: ephemeral ghosts that don’t have any value at all. “
year 2000 dot-com déjà vu all over again ...
“””Tech companies have very few hard assets, for example. Many of them have business models that can be replicated by competitors with very little startup costs.”””
You make a good point.
In comparison here are a couple of industries with huge amounts of hard assets that have done very well this past year.
Agriculture-—has land and farm machines as its hard assets.
Energy—has refineries, production wells, and oil/gas reserves still in the ground as its hard assets.
Let me add this example regarding hard assets—
Chevron (CVX)
Market Value = $355 billion
Property, Plant, Equipment = $150 billion
Facebook (META)
Market Value = $295 billion
Property, Plant, Equipment = $70 billion
And a year ago here were the hard asset numbers for these two companies—
Chevron (CVX)
Market Value = $220 billion
Property, Plant, Equipment = $150 billion
Facebook (META)
Market Value = $995 billion
Property, Plant, Equipment = $70 billion
Perfect example; my wife and I came up at the end of our phone payments and usually get new ones. We couldn’t figure out why we needed to replace a 5G phone with a new 5G phone.
I’m now going to be one of those people with an iPhone 12 when they’re up to 18 or 19.
I would rather put $100 a month into my house than a phone.
Spot on Biden made it happen.
Tech’s reality check: How the industry lost $7.4 trillion in one year
But they got biden in as president and the democrat party running the economy. The ceo’s must be feeling pretty good...
#3 You just described what I am going thru when I “upgraded” windows 7 to Windows 10. It is the same OS since Windows 95!
Just moved things around and slowed things down.
And charged for an “updated” version. What a scam.
Oh a new dot com bubble is going to burst.. to bad so sad!!
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