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Comment by graemep | Hacker News Reader

The headline is misleading. The comparison is of profits and market cap to those of national stockmarkets, not whole countries.

It does show there is a problem. The main one being that most of them do not face real competition - big tech companies can erect too many barriers to entry.

The other question is whether they are overvalued at these levels. The article quotes a 107% return over 2023 in these companies. Did something happen in 2023 to make them so much more valuable? Or was the market badly undervaluing them at the start of the year?

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> big tech companies can erect too many barriers to entry.

It's easy to complain about this. But let's also keep in mind BOTH (1) That erecting a billion-plus actual legit revenue business is NOT easy. (2) That network effects can often amplify such businesses - but that this is not a new issue: remember "nobody gets fired for going with IBM" from way back. (3) That these unstoppable giants DO actually have a short lifetime: remember AOL, myspace, Sony consumer electronics, Yahoo, DEC, HP, GE, oh right IBM, and so many others, in fact most others.

So that one problem is looking at all this with a too short timeframe. In fact, NONE of these are sure bets or guaranteed ANY future. They have to keep performing. They have to keep avoiding fuckups. They will still not avoid better run, or more lucky competitors.

GE? If you mean General Electric I'm confused because they've been around like 130+ years

They have been around a long time, so has IBM, or HP, but they are not exactly at the peak of their glory. They are not in the running right now for "magnificent 8".

Its not a new problem, but i think it has got a while lot worse.

"Nobody got fired for buying IBM" is not really a network effect, and network effects have become far more widespread.

Lockin though network effects and technical measures to make switching hard are far stronger now.

>Did something happen in 2023 to make them so much more valuable? Or was the market badly undervaluing them at the start of the year?

https://ycharts.com/indicators/cme_sandp_500_consolidated_co...

April 2023 the shorts went up 6x over night (from average of 500k last 20 years to 3 million+).

The market is strangling those shorts and until those shorts are dead, the market wont fall. Few of them fell in the last week but the short positions are way too high.

Once those shorts are extinguished the markets will fall to "real" market values.

The US government is heavily propping up the strongest performer (NVIDIA), markets are reacting to this propping up action, and NVIDIA is reaping the benefits for being where they have always been.

The other companies are also expected to do well since they implement software on top of NVIDIA's hardware.

I think out of the list, only NVIDIA is overvalued given today's output and no indication of NVIDIA moving to US-only semiconductor production in my timeframe of ~5 years, but others could be looking at longer periods and justify it. Of course, I'm not an analyst whose opinion will drive buy/sell markers to anyone.

There are likely several problems. Such as headlines that feed obsessions. Such as comparing irrelevant numbers. Such as innumeracy. Such as easy obsessions which distract from real problems. etc, etc.

> Did something happen in 2023

AI ?

Some can be called AI stories. But Apple, Tesla? Probably not.

market was definitely undervaluing at end of 2022. compare to end of 2021 or even pre-pandemic (end of 2019) and returns are quite sensible.

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