google invests in anthropic and spacex - and shows appreciated values as earnings. Then it turns around and rents tpus to anthropic to show it as revenues. The main buyers and sellers for all of this are the hyperscalers, openai and anthropic.
It is a game of musical chairs while the party is still on.
Furthermore, dividends are approved by the board once per quarter or once per year. A dividend on a stock is not a contractual guarantee like it is on a bond. Therefore, it cannot be a basis of value.
With your logic, Berkshire Hathaway is a long-running greater-fool tulip bubble whose shares are only bidded up by finding more shmucks.
If I knew for certain (big if) that a business would never have a liquidity event and I couldn't transfer my ownership then it's dead capital for all intents and purposes and you could consider its value essentially $0, right?
Even if you don't have immediate liquidity, it would obviously be worth something to have a slice of e.g. Rolex SA. That's obviously different than owning a tulip.
The only reason to do a dividend is because people like the feels of getting a cash payout.
Not really, when capital entities came up, the initial goal was to deliver return on invested capital,i.e. something "you get out of the business/back".
Or do you think back in 14th wenn Dutch East India Company was created, that you could by shares and sell them later to a higher bidder after the mission was accomplished? :-)
Which for most investors with Class C/D shares is... the square root of zero.
They assert no control over the business, the only way to benefit from the stock is to find another shmuck to buy it at a higher price.
Use Aldi (revenue ~$120B) as an example. Do you think a person would be a shmuck to buy a slice of it now versus when revenue was $1 million? If not, why not? Your answer will help understand why stock has value even without voting control or dividends.
“Underlying value” is a meaningless word btw
A gallon of oil can be $3 or $6 depending on whether someone is willing to pay. It can also be $10 but only if people are willing to buy it at $10 if not "prices will come down to match the demand" - another way of saying it would be $9..$8...$7...$6 until it matches a buyer at which point gas is $6.
So stock marked is always meaningless except considering it is so large and consequanetial and so many people have access to it that it will be rational automagically. This is more of a belief that seems to be fairly correct than a rational line of thinking. This is similar to Democracy in a way
If you disagree with the above framing, your reasoning will have to concede the existence of underlying value. Yes, obviously the price of a share is the result of the bid and the ask price in the order book. But those prices are based on something, they are not randomly generated. They are based on conceptions of value. The fact that companies with increasing free cash flow over long periods of time always see increasing share prices over time is not random coincidence.
Google/Nvidia and Apple/Nvidia. I don't think there is a world where nvidia will make more money than google or apple or keep making more money than them.
Also another one is Tesla. In my opinion, there is absolutely no world where tesla is worth the current stock price if you compare it to chineese companies or some company like Toyota.
Ofc at this point it depends on if you believe the stock market is absolutely correct or if it is correct in these specific examples. We can agree that it is correct in pricing Google higher than a car rental company but it is more complicated.
The prices are based on something but that something is so obscure and complicated that I don't see a way to make a calculation out of it outside of American ideology of stock market/capitalism.
> The fact that companies with increasing free cash flow over long periods of time always see increasing share prices over time is not random coincidence
This is just trivially related imo there is no real calculation between these things . And this relation it is breaking more and more lately as far as I can understand. This might mean stock market ideology is starting to diverge from the real world which is scary
Last quarter:
Goog: $109B revenue, $62B in profit.
NVIDIA: $81B revenue, $58B in profit.
NVIDIA is growing faster.
I agree about Telsa though.
yes, I'm claiming that the NV-AI hype bubble will pop (which almost everyone expects to one degree or other).
NVIDIA has at least 2 years of solid revenue growth ahead of it.
Beyond that people are dreaming about doing predictions anyway.
Voting rights are also not valuable by themselves - they are only useful to steer the company towards greater future payouts, which means you are appealing to some other entitlement to value.
If you zoom out, a company is a temporary arrangement of people and things that makes more money than it spends _over time_. They are not really designed to accumulate and store value in and of themselves. The machines the employees use to do the work is a small fraction of the overall utility of a living breathing business. The valuable part is the capacity of this techno-social organism to reliably and continuously make profit, which is far greater than the sum of its parts. So if the profit that’s being earned is never paid out to stakeholders, then there’s no point in being a stakeholder. If the profit is redirected to make the organism bigger, then you are trading now-dollars for future-dollars which must be appropriately discounted. If everyone expects a company to do this forever, then the correct price is what the expected liquidation share should be, and that number is basically zero.
Yet, stocks that do not pay dividends exist at high valuations. What that tells you is that modern day stock trading is tulips: the lion’s share of the value derives from a temporarily stable, shared, _correct_ perception that someone else will buy it back from you.
The reality is that general investors are the greater fools in this arrangement. The prevalence of preferred stock is a tell that there are owners and there are “owners”. What we should do is recognize this and admit that the big initial investors and employees themselves are the owners, because they are the group small enough to actually realize liquidation value (should it ever be necessary). The public investors have no realistic claim on that value, so their shares should be more clearly labeled as dividend rights, which would cause them to be priced as such.
In reality, things have value because people believe they have value. That doesn't mean every company that doesn't pay dividends is a speculative tulip bubble.
This is wildly incorrect. A profitable company can decide to begin paying out dividends, which can eventually return > 100% of the investor's purchase price. A company can issue more stock or bonds to raise cash to pay investors. A company can spin off assets to raise cash to pay investors.
Your framing is very much like a short-term PE investor, and if you look to their playbooks you can see there are many ways for intrinsic value to be realized while leaving an operating business behind. There are any number of stories where PE investors make big profits and then turn around and resell the company for more than they paid.
>If a stock never intends to pay dividends, the value of the stock is simply the price the next shumck is willing to pay.
So, by construction, we're talking about the value of shares in a hypothetical company that admits it will _never_ pay dividends. And we're asking what value that stock has BESIDES selling it to another shmuck, so for the purposes of the exercise, it's clearest to just imagine we are not allowed to sell to someone else. Most people will tell you that the stock nevertheless still has value because you own a share of the company itself, which entitles you to a share of its liquidation value. However, the argument I've been making here and in other posts are that:
a. A company tends to be "greater than the sum of its parts". The techno-social arrangement of people and business flows is part of what allows the company to be profitable, so disassembling it, selling off the machinery and returning whatever cash assets it had to the investors is unlikely to cover the market cap (at least, as they are priced today in current climate)
b. Even looking at whatever value IS leftover, the circumstances that lead to you realizing that value are extremely fraught / carry other baggage. It usually doesn't lead to common investors getting value back out, and cannot realistically be a justification for the current valuation of most big non-dividend stocks. For instance, consider how valuable it was to own a share of the underlying capital assets of Bed Bath and Beyond when it declared bankruptcy. It was far worse than just point 'a' ("oh no, we sold all the inventory and real estate it still didn't cover the market cap"). No, if you were a common investor, you essentially got $0 because there were lenders and preferred investors ahead of you in line that consumed those assets and left you crumbs.
c. Acquisitions are the best chance of turning your "ownership of the company itself" into dollars... but this is also slightly cheating, because you're appealing to sale of the shares to another entity again. Now, in real life, if a single entity owned the entire company, it would probably be able to extract some of the business's cash flows (a power which common investors lacked). So it's not quite fair to call the acquiring entity "the next shmuck", since they may be able to realize actual $ value in a way that the common investor couldn't. But technically, if we're playing along with the thought exercise, the premise is that the company continually reinvests in itself and refuses to pay out to the owners. If somebody buys out the company, takes it private, and redirects the profits to their own coffers, the new owning entity is essentially getting dividends by another name.
Even if a company doesn't currently pay dividends, it will eventually do so or be purchased by a company that does. That's the theory at least.
Apple, Oracle, Nvidia, Cisco, Alphabet, Meta, Salesforce, and Qualcomm all pay dividends now. It's not unreasonable to expect Uber and Tesla to pay in the future. However, the median time after IPO for similar companies to pay a dividend is close to 20 years. So we could expect Uber to perhaps wfstart paying sometime around 2039. Tesla...is Tesla so who knows?
It is a way to distribute the money to the investors, that their tax system favors.
You are correct that stock buybacks are another way that companies reward their shareholders.
The big difference is you pay taxes of dividends - you don't pay taxes on the stock going up year over year. Unrealized gains compound much faster than realized ones.
It fills me with a bit of dread about the future of the market. I am 10 years out from retirement, have a bit over 1M sitting in that market, and I wonder if it will implode in the meantime. I am fairly committed to the "invest like a dead man" (i.e. index funds, no touch), but the world we live in today makes me have real doubts that the next few decades will look anything like the last few.
from my research I know that in years where SnP500 drops too much (recessionary periods), BRK-B would soften the blow as Value stocks tend to do well in such times. And usually that works for me.
I see this argument a lot online: "You need more diversity." First, you didn't provide any reason or evidence about why this is a good idea. Second, "more diversity" isn't always better.
The S&P 500 has crushed VT since inception (June 2008). Most people will be surprised to learn that adding smaller cap (domestic) stocks, or international developed country stocks, or emerging market stocks will probably reduce your returns. As an example, you can compare the returns of S&P 500 vs Russell 2000 since 2005 [1]. It is not even close -- S&P 500 crushes again. Also, the vol in S&P 500 was lower than Russell 2000.
My investment philosophy comes directly from Warren Buffett: "Never bet against America". Of the three largest economic zones in the world with free markets (United States, Europe, and Japan), the United States is by far the most dynamic. Ask yourself: In the next 30 years (or more), which of those three regions will grow the most? In my view: Absolutely the United States.
Finally, to people who say that you need international stocks in your portfolio else you are "missing out". You don't. Why? The S&P 500 already has 30% of revenues from countries outside the United States. [2]
[1] https://curvo.eu/backtest/en/compare-indexes/russell-2000-vs...
[2] https://www.spglobal.com/spdji/en/documents/research/researc...
> The 10 biggest companies in the S&P 500 make up almost 40% of the index, and if Anthropic, OpenAI and SpaceX are added later this year, the concentration could approach 50%, see chart below. The bottom line is that the S&P 500 basically doesn’t offer much diversification anymore.
> My investment philosophy comes directly from Warren Buffett: "Never bet against America". Of the three largest economic zones in the world with free markets (United States, Europe, and Japan), the United States is by far the most dynamic. Ask yourself: In the next 30 years (or more), which of those three regions will grow the most? In my view: Absolutely the United States.
The next 30 years will not look like the last 30 years, and to be frank, this administration impaired any thesis of the US being at the center of the economic world globally for at least the next decade or two. The ultimate strength of the US economy was that global trade centered around the US. That trade is already reconfiguring around the US, and will continue to do so to de-risk and decouple. How is the US supposed to grow with restricted immigration? 21 states already have more deaths than births and this will continue to all 50 states eventually. India and Africa are the last parts of the world where any growth will be found, everywhere else is in terminal population decline.
https://www.visualcapitalist.com/fertility-rate-of-world-pop...
So! VT reduces your concentration risk from the AI bubble (versus the SP500) while still keeping you exposed to a risk asset class (total world equities) to capture higher returns than you’d get with bonds.
Your backtesting is of no value in this context, the world has changed permanently due to the actions of this administration. Portfolio composition decisions made today are for the future, not the past. Past performance is no guarantee of future results.
Citations:
https://web.archive.org/web/20210104201135/https://advisors....
https://www.morningstar.com/portfolios/experts-forecast-stoc...
https://www.aqr.com/Insights/Perspectives/The-Long-Run-Is-Ly... (click through to the full version, the last decade+ of US out performance was mostly just the US getting more expensive, not US companies being much better than foreign companies)
https://www.morningstar.com/stocks/you-might-think-industry-... (We see the same results looking at the more recent period of July 1963 to September 2024. US stocks returned 10.64% annually, high-tech stocks returned 11.35%, healthcare stocks returned 11.99%, and both were outperformed by beer, which returned 12.18%, smokes, which returned 14.56%, and guns (defense), which returned 12.77%. Even shops (wholesale, retail, and some services such as laundries and repair shops) outperformed, returning 11.88%)
Also -10% over the last 5 years vs. +103% for the S&P500
> the innovative China
These aren't in the CSI 300 and the legal constructs of listing them via HK or other stock exchanges is unfortunately often questionable.
To point, the economic uncertainties around geopolitics, AI, and war, plus irresponsible debt spending by governments and the prospect of QE (and higher inflation), is pushing long term rates steadily higher. There’s a reasonable chance that 30y treasuries are nearing 6% by the end of next year. Remember that rates and bond prices are inversely related. Anyone who holds bonds in this market will likely lose money. Holding to maturity won’t help much either because if inflation continues to rise, as is a major concern, most or all of that 5% yield gets eaten.
Yes, you lose money (or more precisely you lose opportunity) but you gain certainty. Which is what you want for retirement
That’s pretty much the definition of risk premium.
If you have more than enough saved to meet your basic needs, it does (IMO) make sense to give up some total income for lower variance.
Stocks generally rise with inflation, whereas bonds continue paying out the same nominal amount, which buys you less over time.
As a retiree I'm 50/45/5 in stocks/bonds/cash, having opted for a conservative portfolio. The stocks are the only reason I haven't lost buying power. But the bonds have performed so poorly that I've barely kept up with inflation despite the amazing bull run in stocks.
Currently you get 2.75% yield in real terms for the 30 year maturity: https://www.cnbc.com/quotes/US30YTIP
Are you referring to Anarkulova et al? Might be worth mentioning that the fixed income part is replaced with international equity, not more domestic equity.
Another good option for something that can give good current income is REIT stocks. The management fees on the funds that specialize in these tend to be high for my tastes (I like passively managed funds with management fees that could be rounding errors) so when I’ve had money in REITs, I’ve typically looked at the top stocks in the REIT funds and just bought those directly with dividend reinvestment. Note that because of the nature of REIT dividends and taxes, it’s better to use tax-advantaged accounts to buy these than to put money in a regular retail account towards them.²
⸻
1. Back during the first dotcom goldrush when tech stocks were especially volatile (1999–2001 in particular), people who bought dotcom mutual funds in taxable accounts often ended up with a big distribution from the fund and a drop in share price greater than that distribution so that they would end up not only losing money on their investment but they also had a tax bill for their troubles since distributions will count as realized capital gains.
2. Important to note that I’m not a financial advisor and my advice is probably garbage.
Also, it should be noted, just because it's the optimal to have the most $'s that shouldn't be the goal. The goal should be to survive your retirement with "enough".
And it should also be mentioned, most people can't stomach holding 100% equities, for a very good reason. When the 40-60% market crash happens, people get emotional and make emotional decisions. Sure there are the lucky few that can hold out, but most can't. Are you going to be one of the few lucky ones? If you haven't yet been through it once(last one in the USA was 2008/9), how do you know for sure?
People have forgotten this but equities are an infinite duration asset that are prone to periodic, significant, often violent crashes.
(Edit: often at a time when everyone is absolutely convinced they're the best asset class...)
You can keep some equity exposure but you don't want 1929 or 2008 to happen the day after you retire when you might live for another 30 years
That's assuming you sell the bonds before their end.
Bounds are not as volatile, so even if you lose some money from inflation, you are less likely to lose a lot of money, money you need to live, from the whims of the market. You want to protect your capital, yields don't matter as much if you near the end of your life.
If you are younger, and you make reasonable investments and not gambles, you can expect that your value will go up (more so than with bounds) within a decade or two, and because you have income, you don't need that money and you can wait for the market to recover before selling.
So I disagree that "If you're dreading equity drawdowns, that's what fixed income is for" is absolutely terrible advice.
If I’m 70 years old in 2008, the knowledge that my all-equities portfolio that lost 50% of its value would have recovered in 5 years and outperformed bonds/cash equivalents in 10 years is no consolation.
If I’m 70 years old and have $2,000,000, I don’t need to turn that $2,000,000 into $3,000,000, I need to make sure I don’t turn that into $1,500,000 or $1,000,000 before I get a chance to spend it.
If the 2008 crash is a once-in-a-century recession, that napkin maths out to a 20% chance of that sort of thing occurring during my last 20 years of life.
If you want to get intuition for why this works, this is a really fun and interesting video: https://youtu.be/TQuxVz52w2w
https://investor.vanguard.com/investment-products/mutual-fun...
Normally with these things when absolutely everyone is crowded on one side of the boat, you want to be on the other side
If you haven't lived through a market panic and crash(last one in the US was 2008/2009), then chances are you shouldn't count yourself as being able to do it.
Also, their 100% equity time frames are measured in many lifetimes, not in a single lifetime.
If the goal is to have the biggest $ balance, then sure 100% equities for the win, but if the goal is to survive your retirement with little worry, 100% equities is a terrible idea.
Bonds provide stable cash flow. Equities provide growth/return. Use both in the appropriate amounts for your situation.
> Bonds provide stable cash flow. Equities provide growth/return. Use both in the appropriate amounts for your situation.
Technically when bonds "go to $0", you actually get priority over any corporate assets vs stock ownership, but if the bond went to $0, there is likely not a lot of assets left either. So you can't expect to get saved completely from whatever asset sale happens.
> Technically when bonds "go to $0"
Exactly.
It looks excellent for your needs, and have an incredibly low expensive ratio of 8bps(!). Currently, it is 75% stocks, and 25% bonds. Don't worry about a bubble in the stock market.
EDIT (after reading many, many more negative comments below):
The problem with discussing your investments online, there are a million negative replies. No one ever says: "Yeah, looks pretty good. Leave it alone." I'm here to be that guy.
I really appreciate when someone chooses to be that guy.
Bonds are about steady cash flow, not about total return. "stable" dividend stocks are almost never really stable when the financial world crashes.
> "stable" dividend stocks are almost never really stable when the financial world crashes.
> As others have pointed out, bonds are barely (or not) keeping up with inflation.
For looking at corporate bond rates, it is useful to consider the Bloomberg US Aggregate Bond Index (aka "the Agg"). It has a weighted average maturity of about 8 years (intermediate-term), currently has a yield-to-maturity of about 4.75%.
Everytime I see a debate of stocks vs bonds on the Internet, someone pops into the convo to remind everyone about "stable" dividend stocks. Honestly, for sophisticated investors, I just to don't see this strategy frequently deployed. It seems more like talking heads on the Internet. Has anyone done backtesting on performance of high div stocks vs some combination of S&P 500 and investment grade corp bonds? I would expect the latter to greatly outperform.
So, the optimists all swim in the cash while your contrary position fails to keep pace with the bull market; and then the bear market hits and you all get obliterated equally.
The market of a good leader is a lack of chaos. We are seeing the effects of a chaotic mind untethered from an accurate view of reality. Buckle up
Other than that I’m just not over investing for retirement and instead making sure the money is spent today on family growth and experience.
I eventually just got tired of everyone with an opinion on what doing it right looks like or how to predict the market.
Robotaxi is the next great growth thing. After that, it's Optimus.
Amazon's PE in 2013 was 3000+, but you'd still be up almost 20x if you purchased their stock back then.
https://www.theglobeandmail.com/investing/markets/markets-ne...
That doesn't mean Tesla or SpaceX are good buys though. Maybe they are, maybe they aren't.
2025 total deliveries: 1,636,129
8% decline YOY, Tesla shut down production of Model S & X. Eventually, they will become a pure speculation as a service stock, with zero production. But its cheaper to produce than bitcoin, no energy needs to be expended, runs on pure Musk energy!
Tesla grows in large steps. Next big step is Robotaxis, which is well on its way. After that, robots, for which they have the best real-world AI platform for.
You could say Tesla is a speculation stock as well when they had released the Roadster. Tesla shorters always lose.
Isn't that true more often than not no matter what company you try to short? It's a tough game to play.
> Tesla shorters always lose.
Which Tesla models sell more than the S and X?
I think the mature part of their business is 3/Y, energy storage, and maybe cybertruck, although I also think it's too early to call it because it depends on lower cost cell in house cell production and they only started that recently.
In the near term, the growth part is Semi, cybercab, FSD, lithium cell production, and maybe cybertruck.
In the long term, it's potentially Optimus, more general autonomy, and gigafactories.
https://www.wired.com/2009/10/audi-etron/
That doesn't mean they can't make a mess of things all by themselves. But comparing their infra investments/growth strategy to snake oil when they've gone from nothing to $100 billion/year in 15+ years might be short sighted.
https://www.wired.com/2009/10/audi-etron/
They might might fail, but I wouldn't bet on it. Also cybercab isn't out yet, so any discussion is premature at best.
Cybertruck has been disappointing, but I think a big part of that is cost. They started in house dry 4680 cell/pack production a couple months ago, so we'll see how that goes over the next few years.
Even with China subsidizing cell production and being dominant in the world market, Tesla is still at 150gwh/year compared to 200gwh/year from BYD.
The big question is how the dry cell 4680 packs will perform and how well they can scale production if performance is adequate.
FSD is always a year away, but that's generally OK as long as it keeps improving and there isn't a comparable product in their cost bracket. If someone leapfrogs them, they're done. If not, they might be able to roll everything up all the way through Optimus.
Before finishing this reply, I checked for recent news about the Tesla Semi. I learned that they have a new separate factory (1.7m sq feet!) that has started production and has capacity to produce 50,000 Semis annually. It is next door to the original Gigafactory.
They started producing and selling the Semi in 2022 (after its unveiling in 2017, when they started taking pre-orders) and from everything I've dug up with a bit of Googling it seems they have shipped fewer than 200 trucks by 2025.
We'll see if this new 50k per year factory will actually have customers to ship to, but I wouldn't hold my breath given the current track record.
> The economics of diesel vs electric for heavy haul trucks is a no-brainer. Diesel is much more expensive per kilometer compared to electricity.
The economics you need to look at are dollars/hour/kg delivered. If the battery is too heavy or the charge time too long, the economics turn out much worse. We'll see once real world experiences start being published what it actually does.
> Volume production of the Semi started on April 29, 2026.
You wrote: "If the battery is too heavy". The 2026 version of Tesla Semi is 450kg lighter than 2022 model because they switched the internal voltage from 12W to 48W, which reduces required wire gauges.
You wrote: "The economics you need to look at are dollars/hour/kg delivered." The original idea for a heavy haul electric truck came from within Tesla. Senior execs wanted to know how they could reduce transport costs for parts manufactured in Fremont, Calif to the Gigafactory in Reno, Nevada. They were using heavy haul diesel trucks to move these parts.
> the charge time too long
Note that they never announced that the original run of the Semi would be just tiny. When they unveiled it in 2022, they explicitly said that this was the production version, as opposed to the 2017 concept. They even had a few more (still small 100-200 count) contracts where they kept delaying because they couldn't deliver enough - again suggesting that they were having problems, not intentionally running a pilot program.
> Everything that has actually happened so far with the Semi is that it didn't work as advertised and was deeply unpopular.
> no subsidies for electrification
We're certainly not as far along with the electrification of heavy duty trucks as we are with light duty cars, but the Semi seems fairly popular where it's suitable.
What are you basing this on? Again, they have sold 200 trucks in 4 years. There are some hundreds of thousands of trucks being used in the USA alone. Tesla themselves are claiming they are going to produce (and presumably try to sell) 50k trucks per year. So, by any possible measure so far, Semi has basically 0 adoption. Maybe this is strictly based on production issues and there is huge un serviced demand - I admit this is a possibility, theoretically. But I don't see any reason to actually believe it, and certainly neither the current sales, nor the link you provided, in any way show that this demand will materialize. We'll see soon enough, I guess.
https://www.teslarati.com/tesla-massive-order-semi-370-units...
2026 production is estimated to be 5k-15k.
https://sherwood.news/tech/what-we-know-about-teslas-semi-tr...
IIRC, 50k is full production, but it'll take a year or few to ramp up to that.
I think all signs keep pointing to another huge flop by the end of the year, and that Semi will remain a small niche product that various companies order a handful of and never go on to get more.
370 trucks is also still a tiny order, for a truck that supposedly is cheaper to operate than any other on the market, in the midst of an oil crisis no less.
Drone footage shows new builds, but they obviously need to get volume up.
https://youtu.be/WjkCKODoEjM?t=464
Like I mentioned, I think dry cathode 4680 production is key, and I think an earlier video from the same person discuses what they believe is equipment for a dry cathode line that will be set up inside the semi factory.
It took Tesla a year just to get Model 3 up production from nearly nothing over the first few months to 4k+ units/week, and the semi is larger/more complex. I'd be surprised if we saw 500+ units/month by December.
https://www.teslarati.com/tesla-model-3-production-surpasses...
While high oil prices are attractive in terms of investment, if oil companies aren't very confident about making large/fast investments in this climate, I don't EV manufacturers are going to be.
My guess is that Tesla will gradually ramp production in a cost effective way, like they have in the past. It's better to miss a timeline and deliver a cost-effective/competitive product than the other way around.
Stocks, bonds, etc are effectively NFTs of "you own a monkey image". That monkey image can go poof on a 'market correction' aka 95% of investors lose everything.
With precious metals, you own the material. And silver, gold, platinum, palladium, rhodium and others have innate usage for a variety of industrial and jewelery uses. Their prices may change, but catalytics arent just going to bottom out.
We still have stocks, cause 401k's. But we also have a sizable metal buffer now.
Painful for everyone except the grifters who are engineering this and can get out early enough with their stolen millions and billions. Musk's companies are just a giant pyramid scheme.
It's the swiss cheese model, hidden behind curtains.
This is like a giant sign saying you can buy $2 for a $1.
When the indexes get in -- watch out!
They will have to buy so much SpaceX, that it will force them to sell everything else.
It's still quite some money but it won't crush the market by itself.
You mean the company with such a bad reputation that it had to aggressively rebrand? I take it you've never had the displeasure of doing business with them.
That said it wouldn't surprise me in the slightest to learn that it was one of the most profitable ISPs for investors. That would fit quite well with the general theme of prioritizing the interests of investors over all else.
It's not a "general theme", it's right there in the name of the economic system.
This isn’t hypothetical. SpaceX is increasing Starlink revenue by like 50% per year. And their current Starlink constellation, about 10,000 satellites, has been launched entirely by Falcon 9. They’ve been waiting to launch much larger satellites on starship (in fact they had versions of these ready for several years now, and recently did suborbital tests of some of them on recent starship flights). Starship is about 5-10 times the capacity of Falcon 9, is fully reusable, & has larger diameter allowing much larger satellites. They asked for approval for roughly 40,000 of these larger satellites (~3 times the size of current ones, each about 10 times the bandwidth… and half of the 10,000 are even older designs), and they may eventually do about 100,000 of them & further increase the size and reduce latency (by operating at lower altitude). It’s not an exaggeration to say SpaceX intends to increase bandwidth by at least 100x, maybe a lot more. They intend to use a lot of this extra capacity to expand into mobile coverage as well. They are leveraging their platform for incredibly important national defense capabilities as well, and they operate as their own backhaul using on-board laser links. They can service anywhere in the world that will let them, including lucrative sectors like aviation. I do think it makes sense to value SpaceX as a rapidly growing business, not as a dividend-giving, plateaued ISP like Comcast.
This is all before even mentioning the idea of orbital datacenters.
> Our base-case forecast entails $56 billion in revenue for Starlink in these niche and growth areas by 2035, representing about 45% of the identifiable market we’ve sized
source: https://www.morningstar.com/stocks/spacex-what-investors-nee...
Then either the TAM for Starlink is ~20x bigger than reported by SpaceX (I doubt they would downplay themselves in such a way) or the whole SpaceX TAM is ~5x smaller (much more realistic, if not more than that)
That had to be 20 years ago? Not that anyone likes the cable company.
As a comcast customer, their core internet service seems really solid. It comes in through some sketchy 1980s cables installed by some company who got bought by some company who got bought by Comcast. So occasionally a router in the back of a gas station blows up, the cable system wasn't exactly built to AT&T standards.
If you ignore data caps the core service itself does seem to be much better these days than it was 10 let alone 25 years ago. But then again my sample set consists exclusively of locations where they have one or two FttH offerings as competition so it's not as though they could have remained in such markets without upgrading.
Somewhat tangentially I find it surprising how fast MoCA is when you consider the cables it runs on top of.
Conventional wisdom is that building datacenters is easy, but maybe the CW is wrong on this? If it were easy, companies would not be talking about spending $1500+/kg to put datacenters in orbit. Note that they assume they can get the chips either way, they just need somewhere to run them and they are saying it will be easier to get them orbital than to literally do what Digital Realty does now.
Really out of intellectual curiosity, do you know where this falsehood originated? Obviously new power generation is being built all over the world (US adding 86 GW this year, for example[1]), much of it solar. But I keep seeing this persistent claim.
Once the SEC got defanged, retail investors once again became the primary target.
The scale of corruption in trying to use Index-Funds and Retail investors as the exit liquidity to bail out the VCs who were pumping the AI hype is unheard of.
It's become so damn brazen! I'm surprised Musk's image hasn't crumbled in front of his fan-bois.
They seem to believe the over valuation can be hidden if the shares get picked up by the public quickly enough or that the it can be a quick exit that leaves the public holding the bag.
This is a datacenter REIT bolted onto a social media company bolted onto launch business bolted onto a niche ISP. The expected price to sales is ~100x. The best datacenter REITs trade at ~10x and pay a dividend, which SpaceX does not. Meta trades at ~7x sales. Comcast is one of the best-run ISPs, and it pays a 5.5% dividend on a stock trading at < 1x sales.
To say SpaceX is overvalued is to even beginning to convey the magnitude of the situation. It's going to be very painful when the valuation normalizes.