This feels like dotcom
I think we are going through a dotcom moment, except this time it is for all sectors (except commodities) Back in 99, a) There were plenty of companies that felt earth changing, today, you'd find it hard to even remember their names. Example, boo.com, worldcom, pointcast, webvan.com, pets.com, aadvantage, etoys.com, theglobe.com, go.com, flooz.com, drkoop.com, garden.com, altavista, netscape, excite.com, infoseek, lycos, rocketmail, askjeeves, iriver .. a countless number of names that remind me of .............. doordash, peloton, netflix, docusign, gasbuddy, redfin, zillow, .. they either don't have compelling business models or are one iOS feature away from extinction. b) A lot of "winners" back then, were dead money for the next 10 years. Example: Microsoft and Oracle. If you'd asked anyone in 1999, those two companies had sterling gold future. But in reality, MS was dead money for 10 years, and Oracle for 14 years. Silicon graphics was - we thought so much ahead of their competition, it would kill dell and hp and compaq. I remember, even their office looked futuristic. We thought ebay was the future of ecommerce, not Amazon. c) And a lot of unknowns or left for the dead from back then ended up being the best investments. Google was an unknown company in a tiny office. AAPL was worth 1$ and dropped to 0.29 and had really no hope in that environment, you'd be crazy to invest in it. Amazon was pretty much unimportant. Now we all like to think we are smart people. But sitting with your hard earned money in June 2000, when NASDAQ would have dropped from 3000+ to 1200. Given this backdrop, what would you have invested in? Would you have put money into apple? Or would excite.com down 90% look attractive? Or would you have played safe by putting your money into MCI worldcom? Takeaways: 1. Hindsight is 20/20, and you don't know 💩. All that matters, is future execution and macro environment. You can't predict execution over the long run, so just go with the macro environment - which is weak up for the next week but another 20% down once Q2 earnings start hitting, and hard to predict there on. 2. The macro environment is set by a few powerful people who currently seem to be screwing things up more efficiently than a train crash on fast forward. 3. Things can change, and change very fast. We are one COVID mutation away from disaster, or a misstep in APAC, or NK/Iran doing something, or Ukraine escalation, or riots breaking out over an impending supreme court ruling. Even without those, American hegemony is in a guaranteed free fall with IMO unstoppable momentum for the next generation. 4. Buy and hold works only _if_ you time it right. If things drop another 20%, and inflation rolls back to 6% with no major world events, it may be time to buy. Or if you have the balls, start dollar cost averaging on major red days. 5. Don't bet the farm, keep 12 months of cash handy, know your risk tolerance (age/lifestyle). Go ahead flame me. 🙆🏻♂️
This is more like .io if anything not .com
.io .ai .app .eth
I agree with what you said. But you should include Meta and other social networks too.
Meta/twitter/social networks weren't around back then. But what was there was a clear recognition of the power of advertisement. We had companies like pointcast network and aadvantage trying to capitalize on it. What won in the end was whoever had better execution. Today that is Google and Meta, who will it be in the future, we have no idea. Twitter is not it unless Elon turns it around.
All great points. I remember 1999 well and lost the first $2k I ever saved buying Yahoo stock 😢
In 99, I was young and penniless, so I didn't lose anything because I had nothing to lose. I was jelly of many of my coworkers raking in the dough in 99 pre-crash. While they drove to work in their BMWs, I rode my bicycle in heat, rain .. it SUCKED. I remember a few, very few, good friends who helped me out back then. I will never forget. Today I'm older, and have lost a few million in the last 6 months. I still have enough left to live on. I'll take today over 99. Atleast I'm not scraping pennies for food, or riding that bicycle (which I still have).
Wow you lost a few millions and still have enough to live !! How much do you have left? Are you retired?
Don’t worry 10 years from now we would be buying land in ‘metaverse’
In 99, we had a smartphone called "NeoPoint", I had one. It was a POS and felt like what metaverse feels today. I could imagine it's potential, but I could not imagine a full touchscreen form factor would be it. 20 years from today, we will have something that will bring metavers-ish to reality .. we don't know what it will be or who will bring it and in what form. It _all_ depends on execution. To land metaverse in reality is going to need billions of $ of spend. The market slowing down just made that solid execution, a lot harder to deliver on. But I do believe that Zuck is pretty smart.
Don’t worry Tim Cook or his successor would bring out the ‘full potential’ and the smart PHP guy would be remembered by future generation as someone who tried to copy TikTok.
Let's say earnings miss by 15-20% as you said, do you think market will tank on it or rise on it? How much earnings miss is priced in? I think 15% or so is priced in right now
Guidance may be more important than the actual miss. If guidance is poor and inflation is still hot (which I expect it to be by end of July), market will take a hit. I'm expecting another 20% down from here, S&P 3350.
Let's say next one year guidance is -20% from old forecasts. We are already down more than that. I think it will be only down 10-15% so market will bounce on earnings.
After a long time I read a mature post. Thanks for sharing this.
Agree. OP seems to be very smart and a well put post.
It’s like dotcom—but without sock puppetry.
Not sure I understand how Netflix is grouped in with those other companies. They have revenue and profit to prove their business model (maybe the others do, I haven't really looked into them). Sure their growth has slowed down but they made $1.6 billion profit in Q1. If that doesn't qualify as a good business model what does? More than half of America has an account and they actually use it.
Netflix built its empire when it had little competition. Since then many other players have entered the arena, and Netflix has tried to innovate by creating exclusive content. I don’t think that is enough. They need to reinvent themselves and keep the lead. Matter of time before Amazon prime and apple who are backed by companies that are not one trick ponies eat their lunch. What if Amazon decides to sell prime movies at a loss but with greater content library? Not saying it will happen but things like this do happen.
Those are valid points but like you said all speculation. One could say the exact same things about Meta. I wouldn't however go so far as to say that Netflix and Meta are modern-day equivalents to dot com era failures.
Dotcom bubble was fueled by cheap money and lead to speculation. Companies which were not cash flow positive or idea was to mature for its time or not practical died. Similar comparison today, cheap money fueled speculation and most of the SPACs will fail as they are not cash flow positive or too ahead of their time or too good to be true. The ones you have listed just corrected in terms of PE or PS ratio not the core business. Most of them won't return to high as people may never value them back to same multiples.
Exactly. The drop in stock price reduces the company's ability to raise money but if their cash flow positive that's probably not a huge deal, they just can't spend money to grow.
You’re right, this does feel like dotcom because now Meta is hiring dumbasses like you who try to predict the future like it matters
You're dumb. Each one has their own way of interpretation. Respect what the person has written. It takes time to write a post in detail. Not like you just blabbering something. I would really appreciate if you can point out what's wrong with his/her analysis.
My guy said riots breaking out over Supreme Court ruling… what does this have to do with anything lol