Forget moonshots, investors want profit now
wsj.com
wsj.com
And when at meet-ups people actually tell me that investors will pay whatever for an ai wrapper demo (I saw a few last month that were not even that; just faked) and a few $ charts.
For example I'd like to have someone explain me how housing can be both a good investment for rich people and a commodity people can afford — the way I see it these are fundamentally incompatible goals. One is about making housing prices go up, so your one investment gives you more profit, the other is about building enough to keep the prices stable (or even going down).
This made houses expensive for the ones who wanted to buy a house to live in.
The main profit should instead only come from the actual building of the house, by a construction company, and selling it the first time to someone who wants to live there. This is where value add comes from.
Higher interest rates fixes this.
Yet prices keep going up and up and up and up.
Just slap a massive fine (I mean tax of course but that is just semantics) on any profits from a second or higher house. And dont start with the "you can't change the rules of the game in play"; sure you can, you just dont like it.
The thing is that the interest rates need to stay higher for a long time (many years). Many home owners and speculators have fixed interests on their loans. It is not until they have to be renewed that they feel the effect of the higher interest rates. So unfortunately it will take time.
That being said, things like your solutions should always come with thorough check by a red team. E.g. what about the rich guy just forming a new company per property to evade that tax? So maybe it is smarter to bind that to an actual owner person. How will the shape of houses change if their count gets important (that could be how we get these cyberpunk-megabuildings)? Maybe it should be about rental units instead (or some other clever definition)?
Sometimes I wonder if the best solution wouldn't be to prevent companies from owning housing alltogether..
Higher rates will reduce the profit the land owner can take, but they also increase the costs to the builder who has to pay the bank more to borrow to build (before repaying after selling).
It doesn’t affect the affordability for the purchaser which is set as a given percentage of their monthly income.
Is it purely private money? I've noticed a lot of nonsense European start-ups are basically consulting gigs with a public grant writer.
Today, about 100K GBP or EUR are still "senior" SWE salaries at a lot of non-FANG tech companies around UK and Europe.
In that time, the currencies have also cratered against the USD.
The question is, which is it? Do engineers generate so much value that they should earn hundreds of thousands or are US engineers overpaid.
Given that most the FANGs generate over 1.5M per employee I'm inclined towards the former. Europe/UK is just poor. Our markets are smaller, our dreams are smaller and we settle for lower salaries while around us everything else gets more expensive, land healthcare education and energy.
Tesla does have a serious problem with pricing. Electric vehicles have become cheaper, and nobody can mark up electrics the way they did a year or two ago. Tesla had to cut prices. But not enough. BYD now sells more electric cars than Tesla. BYD now has a good US$20,000 electric car, and they're selling it in Europe, Mexico, South America, and of course China. Not in the US only because of import restrictions. Tesla's factory in Shanghai is way behind schedule and work seems to have stopped before much was built.[1] The Hertz/Tesla debacle has been embarrassing.
Tesla is an auto company, and has the operating problems of an auto company - competition, parts and service, and reliability. Tesla is way overvalued for an auto company. And no, the "autonomy" thing won't save Tesla. Everybody has Level 2 now, and the driving assist systems from Mercedes and Ford (Level 3) are considered better than Tesla's. Waymo, of course, has level 4 and taxicabs running around.
https://web.archive.org/web/20160715152958/https://rework.wi...
What really matters is the hardest philosophical question ever posed.
But if you mean „quality work“ or „useful products“ I have yet to see evidence.
If you mean „shady grift“ or „lying till my ass falls off“ then sure
Zero interest and money thrown at you by VC's is basically no different than the bad parts of socialism. It just sounds better.
You're making it sound like the alternative would have been for all those people to have been unemployed if those zero interest rates would not have happened.
No, the alternative was, as the market is being corrected right now, is these people working in older, more established businesses and economic sectors with steady growth, that are based in reality instead of gaming meme hypergrowth "to the moon" businesses, which are laying them off right now.
There's tones of jobs open in the "un-cool" sectors.
You can't have an Underpants Gnomes plan:
Step 1: Steal underpants
Step 2: ?
Step 3: Profit!
Here Step 1 is building an app or website for most startups. What is step 2? You skipped it. Step 1 is the Moonshot, Step 2 is how you profit from the Moonshot.
1) convince gnomes having no underwear is shameful, if caught by pixies.
2) steal underpants
3) offer replacement underpants at a low price, based on washing and dying the stolen underpants
4) profit.Aside from Cohere, don't they mostly have massive and rapidly-growing revenues?
Moonshots involve fundamental technology risk. LLMs are no longer unproven technology--the problems are in scaling and product-market fit.
In the meantime there will be a zillion competitors to OpenAI using open engines for basic tasks, and it will become a commodity product.
Example: Google. Their p/e ratio of 30 seems low if you assume that they will keep growing like they did for the last ten years. Which was about 19% annually.
At a p/e of 30, to outperform a ten-year bond at current rates, they would have to only grow at about 3% or so from now on.
Yes. So the P/E ratio is a bit high?
This implies zero equity risk premium, to say nothing of single-stock risk.
Avoiding single-stock risk is simple. You buy another stock.
That doesn't follow in any way from the concept of a risk premium [1].
The 4% bonds pay you might be somewhat "risk-free" when it comes to "getting your investment back and 4% on top of it". But it is likely to have been devalued. And often to a large extend.
Just claiming "You are wrong, educated yourself" won't get us anywhere.
I think that you are wrong just like you think I am wrong.
But I am willing to discuss it.
The WSJ acts as though the only portion of the economy that matters is the profit produced by rent seeking investment firms and hedge funds.