1 point by dafty4 0 minutes ago | next | edit | delete [–]
@dang, why was this related post flagged (neither posted nor flagged by me, but of interest since RSS feeds are delayed in posting "live" news updates (e.g., BBC RSS is a delayed version of BBC-Live)):
@dang, why was this related post flagged (neither posted nor flagged by me, but of interest since RSS feeds are delayed in posting "live" news updates (e.g., BBC RSS is a delayed version of BBC-Live)):
The above marginalia.nu just surfaced the following very nice article for me, which neither Google nor Kagi returned in their top 10 search results for the same terms ('thaad aegis hwasong'):
Nasdaq is down 30%. Clearly macro factors like rates and inflation and recessionary pressures are putting pressure on rate sensitive companies generally speaking. You can’t just say it’s ad tracking when dozens of mid and large cap tech stocks are down 30-80% ytd
> This logic has broader implications than most investors realise. Now imagine you will receive $100 a year, for ever. By the reasoning above, this has a finite present value, since compound interest means payments in the distant future are almost worthless. With interest rates at 1%, the payment stream is worth $10,000; at 5%, it is worth $2,000. But as well as reducing the value, the higher rate also changes the distribution of that value. With rates at 1%, less than a tenth of the stream’s value comes from payments made in the first ten years. At 5%, around two-fifths does.
and
> In other words, higher interest rates dramatically alter firms’ incentives when choosing which timeline to invest over. Sacrificing short-term profits for longer-term gains is one thing when you are trying to persuade investors that your superapp, machine-learning algorithm or gene-sequencing widget has the potential to up-end an industry. It is another when even the best-case scenario has its value so heavily skewed towards what can be done in the next decade. Startup founders are used to shaking off derision over implausible, Utopian dreams. It is more of a kick in the teeth to realise that even Utopia is not worth much unless it can be achieved in short order.
Sorry for the long quotes, it was the best I could do, I highly recommend that article in its entirety.
Thanks for this, its confusing for many as to why growth companies(low/no-profit) are getting hit so hard due to rising interest rates and these quotes and the article linked explain the reasoning very well.
However, I think the economist column/article misses some important points:
1: There is a stereotype that corporations only look at the next quarter’s earnings. The article argues the opposite, that corporations are long term focused. The article needs to address that point.
2: Stocks and dividends should be inflation proof (with some assumptions, such as revenues increase with inflation).
3. The article doesn’t seem to mention bonds, even though it talks about constant $ returns. What?
The most interesting part of the article for me was “The original marshmallow test, it turned out, had a flaw. Exclude some children from better-off families (which seems to make them both more willing to delay gratification and more likely to succeed in later life) and much of its predictive power suddenly disappears.” [Slight edits]
The metaverse is their next play to build a world where they are a bit more shielded from Apple/Google/Microsoft's hardware influence. Pivoting a large business is really hard.
I think this, along with a slew of other factors as well.
Meta pivoting to burn money on a VR universe that nobody actually seems to want.
Meta burning FB users by constantly altering their FB news feed, making it less and less a place for friends, and more a place to see endless reposted memes and ads for drop-ship products and stolen IP tshirts.
Meta burning Instagram users by trying to force everyone's favorite photo-sharing app to be a shittier version of TikTok, as well as the above constant feed refactors...
> What makes us more special than other animals? Also nothing, in my view.
If you really believe that then you should go live out in a field and eat grass like oxen rather than writing that comment on the internet. If humans aren't more special, then nothing is special at all.
