The last two years of inflation in tech stocks don't feel like the kind of new-market hype that was so endemic in 2000. I remember the gobs of new companies going unicorn all the time with massive VC investment and tv ad bliztkreigs.
Lately, it feels like a milder ride of speculation in existing companies (Will Zoom be a good investment since everyone is using Zoom?? Amazon is delivering everything! They must go up!).
When some of those gambles don't pay off, and businesses return to a normal-er climate with pre-pandemic profits, a return to 2018/2019 levels wouldn't be so hard to believe, probably with a little dip as home and speculative investors panic.
My concern is that these unprofitable unicorn companies are employing highly competent and employable engineers that other companies will want to hire.
This will cascade, causing smaller companies to layoff staff, so they can replace their low performers with experienced developers on the market at slightly higher wages.
Not much of a survival guide, but a major fundamental is missing that makes this different from the dot com era: earnings growth speculation
Back then, the speculation were on companies that had tech with no viable business models or earnings to grow from.
Today's speculation seems more on the growth of actual earnings. Yes a company grew significantly during the pandemic, but is it sustainable? That's a big difference on what the basis for speculation is.
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[ 3.0 ms ] story [ 25.4 ms ] threadLately, it feels like a milder ride of speculation in existing companies (Will Zoom be a good investment since everyone is using Zoom?? Amazon is delivering everything! They must go up!).
When some of those gambles don't pay off, and businesses return to a normal-er climate with pre-pandemic profits, a return to 2018/2019 levels wouldn't be so hard to believe, probably with a little dip as home and speculative investors panic.
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This will cascade, causing smaller companies to layoff staff, so they can replace their low performers with experienced developers on the market at slightly higher wages.
Back then, the speculation were on companies that had tech with no viable business models or earnings to grow from.
Today's speculation seems more on the growth of actual earnings. Yes a company grew significantly during the pandemic, but is it sustainable? That's a big difference on what the basis for speculation is.