I was expecting to see discussions of something like a yield curve in this article, not the fashion sense of CEOs...
Market timing is pretty much impossible for most people. So many people said we’re heading for a crash 3, 4, 5 years ago. They lost out on so many gains. We might crash tomorrow, or we might crash in 5 years. Nobody knows for sure. Market timing based on articles like this is a fool’s game.
I’d really love these people who constantly predict the crash to also predict when the market will pick up, but of course they never do. They just keep predicting a crash and eventually get lucky. And we only remember the correct predictions. Why don’t they put their money where their mouth is and actually show us all that they’re investing according to their predictions as well...
Exactly, unless the author of the article reveals his positions in the market it’s hard to take seriously.
Not saying I disagree about the possibility of a bubble - but timeframes and magnitude matter - and talk is cheap. A public investment portfolio or asset allocation strategy is worth a 1000 Medium posts.
Otherwise the prediction in the article amounts to ‘something will crash... at some point’. It’s really that generic.
In the current late stage of a cheap debt infused bull market it appears to be more sane to predict a crash and hence discourage people form investing in it altogether (or at least be extremely cautious) rather than speculating on where exactly the market top will occur.
If you miss the timing of the crash all of these gains will have disappeared anyway. Downturns often happen too fast for normal people to react to in time to save their gains.
It's most likely time to buy again directly after a crash or significant pullback has happened and valuations have come down to a more rational level.
No one can predict a market under the current circumstances (federal reserves keeping rates artificially low, pumping new funny money into the market over a period of 5-10 years).
Well, look at where the money has gone. It's now in the stock market and in real estate. Inflation is there, it just didn't trickle down into the CPI basket (yet).
> In the current late stage of a cheap debt infused bull market it appears to be more sane to predict a crash and hence discourage people form investing in it altogether (or at least be extremely cautious) rather than speculating on where exactly the market top will occur.
It's not "market timing" to acknowledge that the longer we go without a crash the more likely that crash is to occur given the length of our current cycle (all other economic or fashion indicators aside). You shouldn't base your economic outlook based on "articles like this", but you should certainly consider the history of our boom/bust economy and how late we are in the cycle.
Market timing may be impossible, you can still observe that it's getting irrational.
Observe crypto currencies at the peak, people were talking nonsense that was never going to be true, and it was quite obviously a bubble. That irrationality just makes it harder to predict when the crash will come.
Yield curve is a somewhat rational measure, bubbles aren't rational (from a financial perspective).
BTW I was given 0.01 of these new fangled bitcoin years ago and promptly forgot about it. I sold in October before the crash. I make no claims to be any kind of investing expert, but I assume that counts as putting my money where my mouth is.
Market timing isn't impossible. Salesman (and the academics hired by them) seem to have a powerful influence over the herd but timing is fairly straightforward...valuation and momentum. That is it.
In addition, there are factors that predict future financial stress fairly well. Yield curve inversion is one, there are other more powerful ones.
In my experience, retail investors get angry because there isn't someone telling them exactly what to do and when. It isn't that easy. Over the long-term, the market is extremely non-random. But over shorter periods, it is very unpredictable. Most people are unable to cope with that psychologically, and that is why the market continues to be so predictable (if you didn't have people thinking they just need to buy-and-hold, or whatever the idea de jour is, you wouldn't have anyone to sell to at the top and buy from at the bottom).
> Mediocrity + two years of tech experience = six figures. Kids who can code and are two years out of school, who are mediocre, are making $100,000-plus in the market
This has been true for almost a decade at this point.
If you adjust for inflation it's been true for about 50 years in every part of the software industry (especially games, fintech, insurtech, automation, web..) among the top companies. Everywhere you look people have made a ton of money whenever the state of the art gets to a point where you can apply software tech to something that's not been done with software before. It's a sort of ongoing 'goldrush' where developers move from one field to another as tech gets to the point where computers are fast enough and clever enough for an existing industry to realise there's enough value in optimization to make it worth paying for.
The only thing that's changed recently is that now startups aren't waiting for lumbering old incumbents of whatever industry it is to invite them in. Now software companies are pushing the incumbents out because the data that old industries use as a moat is open enough to not be a barrier any more.
I am not sure the situation is the same. Code used to be somewhat valuable, like in for example a game engine. Today code is to some extent free, and programming is a service. You don't sell software, you sell whatever investors wants to see. If the economy takes a hit programming won't necessarily be very valuable anymore.
Six figures these days is equivalent to a lot less when this guy was a "CEO". You'd think for how wise this guy pretends to be, he'd understand the rising cost of living and inflation has made a six figure salary barely enough to scrape by in some cities, and is really only a comfortable salary in most others. This entire article just reads like a thinly-disguised millennial hate piece.
TBH I don't see much of a bubble by these metrics. My indicators for "not in a bubble" are:
1. New grads are more interested in getting a job at a big company than in getting a job at a hot startup.
2. Fundraising requires revenue.
3. There is a constant negative press cycle around the industry.
4. People are moving out of Silicon Valley.
5. CEOs from the last bubble are getting indicted.
All of these are present today. Meanwhile, out of the article's list, the only bubble indicator I see is that Apple, Facebook, Google, and Amazon have all built shiny new headquarters. Tech P/Es are incredibly low compared to the general market (Apple is at 14 vs. the market's 25 or so), and the market P/E is not out of line with interest rates (P/E of 25 implies a real rate of return of about 4%, vs. about 2% for Treasuries. Mark Zuckerburg and Larry Page are too busy raising kids to either attend to their companies or be celebrities, Tim Cook is busy running his company, and Jeff Bezos is busy getting divorced. Haven't noticed any particular CEO fashion. People are looking to grey-haired figures for leadership, not young people. Six-figure tech salaries are just inflation: there's money (real money, not bubble-money) in tech, and intense competition for employees, and so that filters down to wages.
If anything, the real tech bubble burst in 2015 with the unraveling of Theranos, Zenefits, and Uber, and we've been in tech recession since. 2015 also seemed to be peak Silicon Valley rent increases, and the last time you could raise capital on just an idea. There was a mini-bubble in crypto in 2017, but that also popped, and the dominant zeitgeist today is complaints about how shitty life is, how there's no growth anywhere, and how we're on the precipice of a revolution, civil war, environmental catastrophe, dictatorship, or all 4.
Yup. There are plenty of signs for a general economic recession in the US, but tech specifically doesn't seem overvalued in comparison, and we're in a state of anything but irrational exuberance in terms of attitudes towards the tech industry and unprofitable startups.
Inverted yield curve, corporate profit margins starting to shrink, cost of hiring going up due to wages hitting rock bottom, and the likelihood of a quick resolution to the trade war becoming less and less likely.
On the flip side, housing prices look strong (though that might have more to do with undersupply than strong demand) and consumer confidence is still high. If one or both of these start dropping, that would be an even bigger indicator that we are close to recession.
While Apple is often deemed to be a 'tech' company, theres tech companies and tech companies. Whilst it might share many similarities with Uber for example, there are important differences and I think in this context saying there isn't a bubble because Apple is sensibly priced is missing the point.
Apple isn't high growth, its making a profit, its business model doesn't depend on a non existent or unproven concept.
Also I don't think Ubers valuation peaked in 2015 either? They seem to have been raising funds on a $50/60bn valuation in 2015, v $85bn when they floated.
Uber’s share price hasn’t increased since 2016 (or maybe 2015? On mobile.) The increase in valuation is essentially equal to the cash they’ve raised since then - 30 billion or so including a big chunk in the IPO.
I'm trying to reason whether what you say is actually correct. I mean if I have (loss making) company worth $1, with $1 in the bank, then raise $10 spend that on 'growth', 1 year later I have a (loss making) company worth $11, with $1 in the bank. It has increased in 'value', non of the shareholders are seeing the benefit though. I definitely don't think you could say there was a crash though.
I like the behavioral signs pointed out in this article - of both people and organizations. The signs of a bubble are becoming much more pronounced than 3 or 4 years ago. Add to that the temporary yield curve inversion a few months ago, and again this week. Along with negative 10-year yields in Germany today...
I took a large hedge against a recession in my portfolio today because I think this one can be severe given the amount of QE.
The long hangover from 2008 has put the cycle out of whack, but I always remember a quote from - I thought it was someone like Soros - saying that the number cranes on the skyline was an indicator of an impending crash. Apparently there is something called the Skyscraper Index which makes largely the same point.
There are a lot of cranes in Manchester and London at the moment.
1. Pricing anomalies where the price of two assets that have fundamental relation to each other violate that relation. For example, in the 1999 bubble, 3Com was a majority owner of Palm, but their market caps were inverted for almost two months.
2. Huge upward movements in price without any corresponding changes in fundamentals. NASDAQ doubled in 2000 without commensurate good news in the prospect of telecom and internet companies. Similar was Bitcoin's tenfolding, or whatever, in 2018.
3. Huge downward movements in price without fundamental news. Again, NASDAQ decreased by 3/4 of its value in a year and a half even though there was only a short recession, rates were low, and economic fundamentals like productivity were growing fast. Part of the reason I listed downwards movements as separate from upwards is that volatility in valuation is an important feature in and of itself.
I'm curious if anyone has indicators to add to the list or is able to apply these indicators to current events.
And as always, even if you have identified a bubble, trading profitably on this is subject to the efficient market hypothesis.
The problem is not identifying bubbles, but knowing when they are going to burst. We have a massive real estate bubble here in Australia, yet I have not the slightest idea when it might burst.
Yes but with governments playing with things like margin requirements, tax policies or income verification it is a moving target. House prices here are unsustainable in the long term, but prices can stay unsustainable for longer than you can stay solvent betting on crash.
"And as always, even if you have identified a bubble, trading profitably on this is subject to the efficient market hypothesis."
Timing is hard in the short run, certainly. However, if you believe you have identified a true bubble, it seems wise to scrutinize long term commitments requiring outsized returns from the underlying asset? Practically, this would mean not tying your career to bubble technologies; not settling down into a bubble-priced home-cum-retirement nest egg; etc.
There are analysis strategies oriented around identifying and trading reversals based purely on price movement. For understandable reasons it's often regarded as forest medicine by fundamental traders, but there's a bunch of people using it everyday profitably. It is more art than science though.
Currently the SP500 is around 11% overvalued, on the log chart from 1970 - which is pretty decent, considering there were much much higher levels (100%+).
Until he can say when and how the debt collection chain will break down and spiral out of control, what types of non performing loans will spark a recession, and how he's going to hedge and make money off that recession, not interested
Can we please have a moratorium on Medium articles? They are now a paywalled site and even content providers are invited to pay to view their bloated blog pages. The site itself offers nothing in addition to the content we freely provided them.
A website idea that I've had for a while now but haven't gotten around to implementing is a website to track predictions by people and whether they ever come to pass. Fear mongering is very profitable and it is very damaging to society. We should track every doom sayer's prediction so that when they inevitably make another we can see their track record.
>Mediocrity + two years of tech experience = six figures. Kids who can code and are two years out of school, who are mediocre, are making $100,000-plus in the market. What’s worse is that they believe they’re worth it. If you can code, yay for you. But you have no real hard skills or management ability. Not recognizing that you’re overpaid means you won’t have the funds to avoid your parents’ basement when shit gets real.
Frankly, this person doesn't seem to know what he is talking about. The most profitable companies in the world are software businesses. Why? Because software is a nearly infinite margin product. The marginal cost of software is so inexpensive that the most profitable companies in the world give it away for free.
Given that selling software is so profitable and is a skilled trade (limiting the supply of developers) it is logical that the compensation of software engineers is so high and it will remain high as long as logic and a technical understanding of computers is required to develop software. Software's penetration into the economy is only just starting.
This sort of prediction: "Things are going really well therefore they must be about to turn really bad." Has a certain emotional appeal but they are not a reliable indication of when a recession is about to occur.
This is probably the weakest "why you should listen to me for timing the market" post that I've seen in a while.
Markets crash based on fundamentals. The specific examples - Meyer, Holmes - are not indicative of market crashes let a lone direct signals or full on causes of them even when a few are grouped together.
Remember the time when people said Trump would kill the market? Dow 22k? I'm not saying it won't eventually happen with the next correction, but if I listened to those guys then, I would've missed ~10%. We don 't know if that correction will be 5, 10, 50%.
Dave Ramsey - Don't time the market. Buy Indicies.
seem to remember reading that by now, internet companies have created more value than was destroyed in the dot com crash.
Maybe people are just speculating wildly because they stakes are high - maybe that's not even wrong behavior?
Also interested in the "giant penises" description of high building. Isn't it simply space efficient to build high rather than flat? At least if space is restricted, like on Manhattan Island, it makes sense. Maybe not so much if you are located in a desert with unlimited space in all directions.
Also, there is a signalling aspect to marketing. Being able to afford expensive marketing (including huge building, expensive ads) proves that you have at least some kind of success so that you were able to come up with the money.
[%] periods when recessions occur tend to be formally defined after the fact, by economists looking backwards at historical data. this may not be particularly helpful for anyone trying to time the market before a crash. "Prediction is very difficult, especially about the future." -- Bohr.
[+] some people may push back on this, saying "stocks are priced high relative to what alternatives?" -- if all alternative asset classes are also "overpriced", then maybe that just means there's far too much cash floating about, and not many good investment opportunities remaining. but if all asset prices are "overpriced", then nothing is, cash is just devalued...
[@] n.b. the blog post that this indicator is based on is intended as somewhat of a joke, as an example of how it is possible to construct rather arbitrary and misleading indicators that look good --- but it's an interesting read: http://www.philosophicaleconomics.com/2013/12/the-single-gre...
The unemployment rate that everyone uses (U.3) actually only counts people who have looked for work in the last 4 weeks since the BLS survey is taken. After that, they fall into (U.6), which is for people who have looked for work in the past year, and after that, they disappear from the stats all together.
Because of this, counterintuitively, the official (U.3) employment rate can go up during a prolonged recession. This happened in 2008 - 2009 when people stopped looking for work.
If you don't trust that site, here is the Civilian labor force participation rate, which indicates the percentage of the working population is actually engaged in the labor force:
I'm not sure how a professor at a pretty good school like NYU has a blunt tone like this.
Beside personally criticizing people by their personal choice, which I found baseless, there is zero information here. There are people with that life style like that all the time, just because they happen to be tech CEO doesn't mean it's a sign to a macro thing like bubble.
One thing I've been regreting the most after 10 year living in the valley is that I shouldn't have listened to the 'tech bubble' propaganda back in 2016, nor delayed buying my first house, which should have saved me ton of cash.
All this post says is how things were the last time a tech bubble burst. It doesn't give any reasons why the timing should be the same for the next one.
When people say we're in a bubble, what they're implying is that the bubble is about to burst. Yes we're in a tech bubble, this is how life is now and I don't see it changing. If/when it bursts, we'll start growing into another one. No clear reason is given why the bubble we're in now can't keep growing for a while longer. If anything the trade war is deflating the bubble. At some point there will be an event or signal when the bubble pops if not sufficiently deflated. The post doesn't mention anything to this effect in my reading.
I think it's more interesting to consider the magnitude of the investors' and CEOs' filter bubble. Maybe that's what the article is trying to get at, and that makes some sense. That bubble is larger and more self-sustaining than any earlier time. I think it's going to take a steady series of failed unicorns to get that signal in.
“Mediocrity + two years of tech experience = six figures. Kids who can code and are two years out of school, who are mediocre, are making $100,000-plus in the market. What’s worse is that they believe they’re worth it. If you can code, yay for you. But you have no real hard skills or management ability.“
So, when this bubble breaks, companies will lay off the coders and have a bunch of managers managing each other into profitability? Makes perfect sense.
Implying Management is a “hard skill” and coding isn’t Is disingenuous at best.
Have you ever been laid off? Because that's EXACTLY how it happens. The young, new, and expensively specialized are dumped first. (It's less about hard and soft skills than it is about generalist vs specialist, and business school preaches that management science is a generalist practice.)
I have, and the companies then failed. Because without the developers, bugs weren't getting fixed, and new features weren't getting developed. If they trimmed from the middle, killing the layer of middle management first, they may still have failed, but not as quickly. The middle managers cost more than the developers, and by not maintaining the products they would not have shed paying customers as quickly.
70 comments
[ 0.22 ms ] story [ 139 ms ] threadIf you predict often enough, one day you will be right...
Market timing is pretty much impossible for most people. So many people said we’re heading for a crash 3, 4, 5 years ago. They lost out on so many gains. We might crash tomorrow, or we might crash in 5 years. Nobody knows for sure. Market timing based on articles like this is a fool’s game.
I’d really love these people who constantly predict the crash to also predict when the market will pick up, but of course they never do. They just keep predicting a crash and eventually get lucky. And we only remember the correct predictions. Why don’t they put their money where their mouth is and actually show us all that they’re investing according to their predictions as well...
Not saying I disagree about the possibility of a bubble - but timeframes and magnitude matter - and talk is cheap. A public investment portfolio or asset allocation strategy is worth a 1000 Medium posts.
Otherwise the prediction in the article amounts to ‘something will crash... at some point’. It’s really that generic.
If you miss the timing of the crash all of these gains will have disappeared anyway. Downturns often happen too fast for normal people to react to in time to save their gains.
It's most likely time to buy again directly after a crash or significant pullback has happened and valuations have come down to a more rational level.
No one can predict a market under the current circumstances (federal reserves keeping rates artificially low, pumping new funny money into the market over a period of 5-10 years).
People were making the same argument in 2012.
Observe crypto currencies at the peak, people were talking nonsense that was never going to be true, and it was quite obviously a bubble. That irrationality just makes it harder to predict when the crash will come.
Yield curve is a somewhat rational measure, bubbles aren't rational (from a financial perspective).
BTW I was given 0.01 of these new fangled bitcoin years ago and promptly forgot about it. I sold in October before the crash. I make no claims to be any kind of investing expert, but I assume that counts as putting my money where my mouth is.
In addition, there are factors that predict future financial stress fairly well. Yield curve inversion is one, there are other more powerful ones.
In my experience, retail investors get angry because there isn't someone telling them exactly what to do and when. It isn't that easy. Over the long-term, the market is extremely non-random. But over shorter periods, it is very unpredictable. Most people are unable to cope with that psychologically, and that is why the market continues to be so predictable (if you didn't have people thinking they just need to buy-and-hold, or whatever the idea de jour is, you wouldn't have anyone to sell to at the top and buy from at the bottom).
This has been true for almost a decade at this point.
The only thing that's changed recently is that now startups aren't waiting for lumbering old incumbents of whatever industry it is to invite them in. Now software companies are pushing the incumbents out because the data that old industries use as a moat is open enough to not be a barrier any more.
if the economy takes a hit, a lot of things won't be as valuable as they once were. that's kinda the idea of a recession.
1. New grads are more interested in getting a job at a big company than in getting a job at a hot startup.
2. Fundraising requires revenue.
3. There is a constant negative press cycle around the industry.
4. People are moving out of Silicon Valley.
5. CEOs from the last bubble are getting indicted.
All of these are present today. Meanwhile, out of the article's list, the only bubble indicator I see is that Apple, Facebook, Google, and Amazon have all built shiny new headquarters. Tech P/Es are incredibly low compared to the general market (Apple is at 14 vs. the market's 25 or so), and the market P/E is not out of line with interest rates (P/E of 25 implies a real rate of return of about 4%, vs. about 2% for Treasuries. Mark Zuckerburg and Larry Page are too busy raising kids to either attend to their companies or be celebrities, Tim Cook is busy running his company, and Jeff Bezos is busy getting divorced. Haven't noticed any particular CEO fashion. People are looking to grey-haired figures for leadership, not young people. Six-figure tech salaries are just inflation: there's money (real money, not bubble-money) in tech, and intense competition for employees, and so that filters down to wages.
If anything, the real tech bubble burst in 2015 with the unraveling of Theranos, Zenefits, and Uber, and we've been in tech recession since. 2015 also seemed to be peak Silicon Valley rent increases, and the last time you could raise capital on just an idea. There was a mini-bubble in crypto in 2017, but that also popped, and the dominant zeitgeist today is complaints about how shitty life is, how there's no growth anywhere, and how we're on the precipice of a revolution, civil war, environmental catastrophe, dictatorship, or all 4.
Out of curiosity, what "signs" are you referring to?
https://www.newsweek.com/economic-recession-2019-us-economy-...
"US recession risk rises as trade tensions with China remain unresolved"
https://www.foxbusiness.com/economy/us-recession-risk-rises-...
"Morgan Stanley says economy is on ‘recession watch’ as bond market flashes warning"
https://www.cnbc.com/2019/05/28/morgan-stanley-says-economy-...
On the flip side, housing prices look strong (though that might have more to do with undersupply than strong demand) and consumer confidence is still high. If one or both of these start dropping, that would be an even bigger indicator that we are close to recession.
Apple isn't high growth, its making a profit, its business model doesn't depend on a non existent or unproven concept.
Also I don't think Ubers valuation peaked in 2015 either? They seem to have been raising funds on a $50/60bn valuation in 2015, v $85bn when they floated.
I'm trying to reason whether what you say is actually correct. I mean if I have (loss making) company worth $1, with $1 in the bank, then raise $10 spend that on 'growth', 1 year later I have a (loss making) company worth $11, with $1 in the bank. It has increased in 'value', non of the shareholders are seeing the benefit though. I definitely don't think you could say there was a crash though.
I took a large hedge against a recession in my portfolio today because I think this one can be severe given the amount of QE.
There are a lot of cranes in Manchester and London at the moment.
1. Pricing anomalies where the price of two assets that have fundamental relation to each other violate that relation. For example, in the 1999 bubble, 3Com was a majority owner of Palm, but their market caps were inverted for almost two months.
2. Huge upward movements in price without any corresponding changes in fundamentals. NASDAQ doubled in 2000 without commensurate good news in the prospect of telecom and internet companies. Similar was Bitcoin's tenfolding, or whatever, in 2018.
3. Huge downward movements in price without fundamental news. Again, NASDAQ decreased by 3/4 of its value in a year and a half even though there was only a short recession, rates were low, and economic fundamentals like productivity were growing fast. Part of the reason I listed downwards movements as separate from upwards is that volatility in valuation is an important feature in and of itself.
I'm curious if anyone has indicators to add to the list or is able to apply these indicators to current events.
And as always, even if you have identified a bubble, trading profitably on this is subject to the efficient market hypothesis.
Unlike USA, Australians can't suddenly drop their debt for properties. Maybe under Labor you would get your burst bubble.
Timing is hard in the short run, certainly. However, if you believe you have identified a true bubble, it seems wise to scrutinize long term commitments requiring outsized returns from the underlying asset? Practically, this would mean not tying your career to bubble technologies; not settling down into a bubble-priced home-cum-retirement nest egg; etc.
https://imgur.com/a/fykBcNa
Also check out this: https://www.leggmason.com/en-us/advisor-resources/main/us-ec...
Until he can say when and how the debt collection chain will break down and spiral out of control, what types of non performing loans will spark a recession, and how he's going to hedge and make money off that recession, not interested
Just product placement for his new book
>Mediocrity + two years of tech experience = six figures. Kids who can code and are two years out of school, who are mediocre, are making $100,000-plus in the market. What’s worse is that they believe they’re worth it. If you can code, yay for you. But you have no real hard skills or management ability. Not recognizing that you’re overpaid means you won’t have the funds to avoid your parents’ basement when shit gets real.
Frankly, this person doesn't seem to know what he is talking about. The most profitable companies in the world are software businesses. Why? Because software is a nearly infinite margin product. The marginal cost of software is so inexpensive that the most profitable companies in the world give it away for free.
Given that selling software is so profitable and is a skilled trade (limiting the supply of developers) it is logical that the compensation of software engineers is so high and it will remain high as long as logic and a technical understanding of computers is required to develop software. Software's penetration into the economy is only just starting.
Markets crash based on fundamentals. The specific examples - Meyer, Holmes - are not indicative of market crashes let a lone direct signals or full on causes of them even when a few are grouped together.
Remember the time when people said Trump would kill the market? Dow 22k? I'm not saying it won't eventually happen with the next correction, but if I listened to those guys then, I would've missed ~10%. We don 't know if that correction will be 5, 10, 50%.
Dave Ramsey - Don't time the market. Buy Indicies.
Maybe people are just speculating wildly because they stakes are high - maybe that's not even wrong behavior?
Also interested in the "giant penises" description of high building. Isn't it simply space efficient to build high rather than flat? At least if space is restricted, like on Manhattan Island, it makes sense. Maybe not so much if you are located in a desert with unlimited space in all directions.
Also, there is a signalling aspect to marketing. Being able to afford expensive marketing (including huge building, expensive ads) proves that you have at least some kind of success so that you were able to come up with the money.
* as others mention, yield curve inversion. e.g: https://financial-charts.effingapp.com/yield-curve
* unemployment rate climbing after hitting a local minima. e.g. https://financial-charts.effingapp.com/usa-unemployment
Some other indicators that expected long-term stock market returns may be low:
* valuation ratios -- in terms of P/B, P/E, CA(P/E), etc, are high [+], compared to historical norms. e.g. https://www.starcapital.de/en/research/stock-market-expectat...
* supply & demand factors, in terms of how much the average investor has allocated to the stock market [@]. e.g. https://financial-charts.effingapp.com/
[%] periods when recessions occur tend to be formally defined after the fact, by economists looking backwards at historical data. this may not be particularly helpful for anyone trying to time the market before a crash. "Prediction is very difficult, especially about the future." -- Bohr.
[+] some people may push back on this, saying "stocks are priced high relative to what alternatives?" -- if all alternative asset classes are also "overpriced", then maybe that just means there's far too much cash floating about, and not many good investment opportunities remaining. but if all asset prices are "overpriced", then nothing is, cash is just devalued...
[@] n.b. the blog post that this indicator is based on is intended as somewhat of a joke, as an example of how it is possible to construct rather arbitrary and misleading indicators that look good --- but it's an interesting read: http://www.philosophicaleconomics.com/2013/12/the-single-gre...
Because of this, counterintuitively, the official (U.3) employment rate can go up during a prolonged recession. This happened in 2008 - 2009 when people stopped looking for work.
An estimate of the actual employment rate, including long term discouraged workers, is here: http://www.shadowstats.com/alternate_data/unemployment-chart...
If you don't trust that site, here is the Civilian labor force participation rate, which indicates the percentage of the working population is actually engaged in the labor force:
https://www.bls.gov/charts/employment-situation/civilian-lab...
Beside personally criticizing people by their personal choice, which I found baseless, there is zero information here. There are people with that life style like that all the time, just because they happen to be tech CEO doesn't mean it's a sign to a macro thing like bubble.
One thing I've been regreting the most after 10 year living in the valley is that I shouldn't have listened to the 'tech bubble' propaganda back in 2016, nor delayed buying my first house, which should have saved me ton of cash.
When people say we're in a bubble, what they're implying is that the bubble is about to burst. Yes we're in a tech bubble, this is how life is now and I don't see it changing. If/when it bursts, we'll start growing into another one. No clear reason is given why the bubble we're in now can't keep growing for a while longer. If anything the trade war is deflating the bubble. At some point there will be an event or signal when the bubble pops if not sufficiently deflated. The post doesn't mention anything to this effect in my reading.
I think it's more interesting to consider the magnitude of the investors' and CEOs' filter bubble. Maybe that's what the article is trying to get at, and that makes some sense. That bubble is larger and more self-sustaining than any earlier time. I think it's going to take a steady series of failed unicorns to get that signal in.
Multiplication of people writing frantic click bait articles about how bad the current state is.
So, when this bubble breaks, companies will lay off the coders and have a bunch of managers managing each other into profitability? Makes perfect sense.
Implying Management is a “hard skill” and coding isn’t Is disingenuous at best.
Did the author just implied that one would start or/and run a company out of some moral responsibility for others' families livelihood?