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Comment by llampx | Hacker News Reader

I think TSLA and AMD were the original meme stocks.

AMD isn't a meme stock - I knew it was going to be a safe bet when it was at 5, but didn't have money to do anything with it.

It is guaranteed to exist, as it is the only x86 competitor to Intel, and IIRC their x86 license is non-transferable.

It is nvidia's only main competitor.

It does its job pretty well.

Is it a blue chip in terms of stability? Clearly it is a bit more volatile. But it isn't dying anytime soon.

Because a company is going to exist doesn't mean it's going to jump 10x+ in value in a few years.

I remember following the WSB AMD memery several years ago and no one really predicted what would actually happen over the ensuing years.

Intel shit the bed on some key foundry investments and AMD had some chip breakthroughs to capitalize on their screwup.

So yeah, some people ended up being right that AMD would do well but I never saw anyone predict WHY.

ANd I can point you to many many that were predicted to do gangbusters and never amounted to anything, funny those always get forgotten.

I give myself one good hard slap to the face every morning, because I bought AMD in the ~$5/share range, and then sold when it managed to get to ~$7/share because I didn’t think it was going anywhere. And then I go stand at the window and gaze longingly at my imaginary WRX parked outside.

Sigh. If I only had known exactly how badly Intel would do…I bought the stock because I figured they’d get a little bump because of console sales, and then got impatient.

It’s all gambling. People need to stop expecting to strike it rich and just build wealth incrementally. Central banks have made that hard to do though with historically low interest rates and rising risks of inflation.

Mind you, the vast majority of my retirement money is in index funds and other boring investment vehicles.

The AMD trade was (reasonable) fun money.

Sounds like advice for a previous generation. Then, it contradicts itself by say why it won't work (correctly). Maybe its time to rethink those half-century-old memes like 'build wealth incrementally'.

“This time it’s different”

Nothing has changed except central bank policy encouraging rampant speculation. The bull market won’t last forever and every generation thinks the fundamentals don’t matter anymore, until suddenly they do. To be fair it is extremely hard to build wealth incrementally these days because of central bank policy, but it’s way better than yoloing life savings.

Is it possible the bull market reflects the realities of big businesses, and tech businesses especially, reaping the rewards of automation and scalability and near zero marginal costs?

Anything is possible. That's probably true for Apple and Amazon but those are the exception. That's definitely not true for Uber, who lost 8.5 Billion (!) from operations in 2019: https://d18rn0p25nwr6d.cloudfront.net/CIK-0001543151/f272e03... Not true for WeWork either: https://www.sec.gov/Archives/edgar/data/1533523/000119312519...

Maybe those are exceptions too but seems like the most hyped companies have not brought marginal costs near zero.

What does "most hyped" mean? Why does WeWork matter at all in this discussion? They got destroyed for having weak prospects when they tried to come near the public markets.

I'm looking at this list of the S&P 500 companies, and they mostly have very solid earnings and fundamentals:

https://fknol.com/list/market-cap-sp-500-index-companies.php

I went through the top 100 companies, and the only one that is a "bet" is Tesla, except they have many, many cars on the road and have been delivering product that people want to buy.

If anything, I'm even more bullish for all these huge companies, as absent any government action (which I doubt), who is going to take them on? They will continue to go vertical and eat each other's business, maybe. But that doesn't really affect you if you're holding the whole index fund ETF.

Well the S&P is an index of the largest companies so they're going to be more solid than the rest of the market. WeWork was attempting an IPO and had a ton of hype, if that hype was because of improvements on marginal costs you would have seen it there. The S&P 500 PE ratio is objectively high right now. Whether it's high because of strong fundamentals or bubble effects is the million dollar question. https://www.macrotrends.net/2577/sp-500-pe-ratio-price-to-ea...

Respectfully those are meme stock arguments. A company can have all those things and be worth between 0 and 1 trillion, the question is whether the company is valued accurately by the markets and worth the price.

Tesla is valued at what Apple was in 2019, but hasn’t made any profit ever without tax credits. AMD is at $100 billion, which seems high but could be worth it. Doesn’t matter if they mismanage cash and have to be acquired though.

With AMD you have the clear competitors Intel and Nvidia with their respective market share, revenue and valuation. There was a real world reason for their low valuation (Bulldozer) and a real world reason for there stock to recover (Zen). Intel had been stagnant for years and their 10nm was obviously not working. With AMD's and Jim Keller's track record there was a reasonable case for them managing to catch up and their stock to rise accordingly. If those are meme arguments the whole market is a meme.

No, they're stock arguments. They're "fundamentals". Did I look at their balance sheet, no. But asking questions about their competition and likelihood of being around and healthy in a few years isn't meme.

Even "Hey this has short 140% of float" isn't a meme stock thing.

The definition of "meme" stock is it being a meme - is it getting hyped up on social media and reddit with inside jokes and collective action (as much as they pretend it isn't collective action).

>"They're "fundamentals". Did I look at their balance sheet, no."

Please for the love of god tell me you are trolling right now.

Not quite. I looked at a small piece of a picture, and the parent is accusing me of reading a reddit thread and going "ape strong, AMD to the moon".

What I didn’t say that. I said those are meme stock arguments, which they are. Surface level factors that may or may not matter but don’t give the whole picture of cash flow which is ultimately what matters.

If you didn’t look at the balance sheet I don’t see how you can claim to care about fundamentals. The company’s ability to be in business in a few years depends on how much cash they have and how much they can generate. If the market tanks financing dries up, and if they aren’t cash flow positive then it’s game over.

Whether people like the product or not and how they compare to competition only matters if they have cash figured out. Anybody can sell a dollar bill for $0.80 and have a fantastic product, doing it profitably is the trick. WeWork is probably the best example, entering high risk long term leasing commitments and subleasing that space at a loss. They were bid up to an insane $40 billion valuation based on just this, until they tanked pre IPO. Now with the low probability, high impact risk of a global pandemic coming about, they’re struggling to survive and I’m surprised aren’t bankrupt yet. Still have a better product than the competition though.

> The company’s ability to be in business in a few years depends on how much cash they have and how much they can generate. If the market tanks financing dries up, and if they aren’t cash flow positive then it’s game over.

Sure, and these considerations are all things that are downstream of product, competitive positioning and IP.

No what you don't understand is that no one else in the market had caught on to the fact that AMD was the main competitor to Intel!

If only we had known way back when!

And clearly Intel's products aren't working, can they even make processors?

This is starting to feel like a moral crusade when that investment reasoning is consided meme/speculative arguments. I know retirement planners who manage 200m in asse6s who have been in business for 30+ years who look at the same reasonings as that. You cant really find an undervalued stop without some sort of assumptions. Might as well just buy an index fund.

It is a moral crusade to try to get people to understand risk. I can go all in on TSLA call options and make a killing and think I understand how markets work, but the risk I’m taking on by doing that is ridiculous. I’d like to know how those 30 year experience retirement planners did in 01 or 08. Bubbles happen because investors become comfortable taking huge risks that are unlikely to happen, but when they do they get crushed. Picking up pennies on front of a steamroller.

AMD was not a meme. If anything it was a proxy for TSMC doing well.

The business case was apparent, and it happened: Intel apparently decided to get to their next node using, I don’t know, a magnifying glass and a flashlight, they fell badly behind, and now AMD has an extremely solid position in the high-end enthusiast market, plus a plum spot in PlayStation and XBox sales.

It's always interesting how the great investments are always so obvious looking in the rear view mirror.

The South Sea Company was the original meme stock.

That's kind of misrepresenting what the South Sea Bubble was, with meme stocks the public are at least in on the joke, the South Sea Bubble was a private conspiracy/social phenomenon of a different fashion.

Reading some of the comments here it's pretty clear the many truly believe the GME hype: that it was somehow something more than a short squeeze, and that it is magically going to transform into a business with revenue able to support its current valuation.

With TSLA and AMD, people at least had a thesis. One may argue those were wild equity stories, but at least they existed.

Hertz is a dying company in a dying industry and while I admit I don't follow it closely, I have not seen anyone come up with a defensible story for why one should own that stock.

Talking about the idea that AMD was a meme stock on HN seems strange. There were long discussions here before the AMD stock price rise about the technical merits of their platform, and further discussions about how they were getting better and better distribution after it did release.

These are pretty fundamental reasons why a stock price might be likely to go up.

Those at least had a growth story.

HRTZ and GME are pure plays on the other hand.

Where did you get this about GME? It literally skyrocketed once Chewy team started to take over and transform company.

Personally, I think 80% of the reason it skyrocketed was for the short squeeze, 20% because of the new team and it being undervalued if you believed in that new team. $30-$40 seems reasonable if you believe the team is gonna turn the company around IMO, but people were putting thousands and tens of thousands into shares because they're hoping the short squeeze puts it to $1k+ (at least that's the meme/not a meme if you believe WSB).

It became a Ponzi effect where buying made the price go up and encouraged more buying. Short interest being so high helped a lot.

OK, what does that even mean?

They are a physical store that sells physical games.

Physical stores are in dire straits.

Some new game consoles don’t even use physical games, namely the base PlayStation and Xbox.

What do you even transform into? A dedicated amiibo shop? The future is pretty obviously download-only for games.

Just random though - turn them to a gaming cafe. I could see how from time to time I will join with my friends to play something old school way. For younger it is also cool - escape parents home.

Not a bad idea.

Though, N=1, malls have pivoted (sorry) into that sort of live event space mode. When I was visiting family, the local mall had replaced a former anchor store with a really quite nice arcade.

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