Comment by baby | Hacker News Reader

Comment by baby | Hacker News Reader

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Because I'm a huge noob too I googled these terms:

* EBITDA or Earnings Before Interest, Tax, Depreciation and Amortization. It's pretty much the net (before-tax) income of the company (per year), but after expenses that are easy to calculate (like employees' salaries and rent).

* DJIA or Dow Jones Industrial Average. It seems to be an index of the stock market, meaning a number calculated from the price of a selected number of stocks (in practice, 30 large US companies).

* The Flywheel Effect. I guess to understand this one you need to understand what a flywheel is, it seems to be a pretty heavy wheel. The metaphor here is that building a successful company is like pushing a massive wheel for a very long time until it catches some momentum and roll by itself?

It's worth noting that the DJIA comment was specifically mentioned because it contains only 30 companies and a terrible indicator of the overall health of all American companies. But it's used as the primary indicator of the health of American companies in nightly news reports.

"Similar to the DJIA, last-round private valuations are harmful metrics that create the illusion of prosperity."

A lot of people just wish the DJIA 30 would disappear from popular use. It's a harmful metric that gives the illusion of prosperity.

The Russel and S&P are generally right next to the Dow in financial news. There is value in each of those indexes if you know what you are evaluating. The health of large companies does reflect the health of the overall economy for the most part. Combining that with the S&P gives a pretty good measure of the US economy.

The only people who don't like the DJIA are nerds who are annoyed that such a simple model works so well at approximating the whole market:

https://www.marketwatch.com/investing/fund/vtsax/charts

Flywheel effect is a jeff bezos/jim collins (good to great) reference: https://medium.com/swlh/the-amazing-flywheel-effect-80a0a21a...

And that can be used to spin up secondary revenue streams more easily than starting from scratch.

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