
Partying like it’s 1999 – Initial public offerings are back in Silicon Valley - prostoalex
https://www.economist.com/business/2020/08/22/initial-public-offerings-are-back-in-silicon-valley
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contingencies
This is uncharacteristically poor journalism from the _Economist_. The graph
shows excepting 2009 and 2016 there has been effectively no significant
downturn, whereas the title suggests an order of magnitude change in the last
two years.

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knolax
I wouldn't say uncharacteristic. The economist has always been short on
details and overflowing with unecessary snark.

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supernova87a
Agreed, the Economist's habit of laying out a few kindergarten-level facts and
then extrapolating to what the world should do is pretty irritating. Enough
that after one subscription I swore off reading them generally.

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Austin_Conlon
Can you provide some examples? I think this would only apply to the Leaders
sections, but the point of it is to serve as introductions for later articles.
The rest I've found to be thorough, especially the Briefing section and
Technology Quarterly. It's definitely full of "shoulds" from a classical
liberal perspective.

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neonate
[https://archive.is/GSxK4](https://archive.is/GSxK4)

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coliveira
The stock market is living in a dream land where it doesn't matter that the
real economy is doing badly, they can count on nearly unstoppable supply of
money flowing from the Fed. In this situation it is obvious that all stock
prices will skyrocket, but the most probable outcome is a crash in 1929's
style.

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xoxoy
And Tesla just surpassed Walmart in market cap even though their total
quarterly deliveries have been relatively flat around 80-90k per quarter for
almost 2 years.

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01100011
It's an obvious short opportunity but how can you know how long the market
will remain irrational?

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api
Is it? Which company has more growth ahead of it? Wal-Mart is slowly digesting
in the Amazon Saarlac pit like all retail.

Stocks are valued by growth unless they pay a lot of dividends, and dividends
are rare today.

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01100011
I need what Walmart sells. I don't need anything Tesla sells.

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Tade0
Problem is, anyone can have what Walmart sells.

Nobody really has what Tesla sells.

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adventured
> Problem is, anyone can have what Walmart sells.

5,000 massive scale physical retail buildings (at a time when other physical
retail is being mauled), a brand with buyer loyalty that took half a century
to create, operating on a 3% profit margin in a hyper low margin business, and
excellent real-estate locations across most of the US.

Be sure to wave to Kmart, Penneys, FW Woolworth, JG McCrory's and Sears on the
way to having what Walmart has.

No, you can't have what Walmart has.

Nobody can afford to replicate what Walmart has built up over time. And if you
try to compete with them via ecommerce instead of physical retail (thinking
that will somehow be cheaper), you'll need to spend tens of billions of
dollars on distribution to do it (and good luck competing with Amazon).

If you had to choose who to compete with, Walmart & Amazon or Tesla, that's a
comically easy choice. That's why companies like Nikola or Rivian exist (and
37 Chinese Tesla clones), and absolutely nobody is eager to build a thousand
new giant physical retail stores to go after Walmart (besides, you can't get
the money to do it, there are no funding sources for that financially suicidal
move).

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gleenn
I understand your point for the most part, but the argument isn't that you
have to build exactly what Walmart has (hundreds of buildings with mass
distribution). Any Joe can setup a grocery/goods store tomorrow. Will they
crush Walmart any time soon? Nope. Good luck trying to build what Tesla has.
Call me a fanboy, but there is some amazing technology in those cars, and
while strapping a battery on a frame with a electric motor looks easy, doing
it at scale and as efficiently as they do is definitely not. Many of those 37
or whatever Chinese knock-offs have failed already. I would never buy a knock-
off electric car, but I would definitely shop at Joe's convenience store to
pick up some bananas, I do it daily actually.

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Element_
Isn't VW now producing 2 fully electric cars at scale based on their new
electric platform? I think the ID3 is shipping to customers in Europe already
or in the near future.

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Tade0
Yes, but while those are somewhat cheaper than the Model 3, they don't match
it on range, power and efficiency.

Also they are somewhat delayed because someone figured that it would be a good
idea to create a lot of new software(a whole new OS?) specifically for this
car.

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dehrmann
The interesting game people will get to play is if Biden wins and Democrats
control at least the House, do you hold onto your shares and hope the
Democrats bring back the SALT deduction.

~~~
jedberg
They won’t bring it back. They don’t want the SALT deduction either. They just
didn’t want to piss off their voters.

To be fair, getting rid of SALT was a good move. It makes the tax code more
fair. There is no reason for the federal government to subsidize someone who
lives in California or New York.

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jedberg
Might as well get your piece of the pie while the government is still pumping
billions into the market with QE.

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WealthVsSurvive
Partying like it's 1929.

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jdc
However unlike that period, we won't have to deal with a contracting money
supply.

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duaoebg
The Weimar Republic didn't have a contracting money supply in that period

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BenoitEssiambre
What do you think caused the deflation then?

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ByteJockey
The Weimar Republic didn't experience deflation during that period.

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BenoitEssiambre
"[Brüning] enacted a draconian policy of deflation and drastically cutting
state expenditure.[5] Among other measures, he completely halted all public
grants to the obligatory unemployment insurance introduced in 1927, resulting
in workers making higher contributions and fewer benefits for the unemployed.
Benefits for the sick, invalid and pensioners were also reduced sharply.[52]
Additional difficulties were caused by the different deflationary policies
pursued by Brüning and the Reichsbank, Germany's central bank.[...]Brüning
triggered a deflationary internal devaluation by forcing the economy to reduce
prices, rents, salaries and wages by 20%."

This made unemployment skyrocket and arguably caused the rise of Hitler.

[https://en.wikipedia.org/wiki/Weimar_Republic#Br%C3%BCning's...](https://en.wikipedia.org/wiki/Weimar_Republic#Br%C3%BCning's_policy_of_deflation_\(1930%E2%80%931932\))

EDIT: I'm not sure why all the downvotes, maybe because it looks like I
Godwin-ed the thread? I was just paraphrasing the rest of the wikipedia
section:

"In 1933, the American economist Irving Fisher developed the theory of debt
deflation. He explained that a deflation causes a decline of profits, asset
prices and a still greater decline in the net worth of businesses. Even
healthy companies, therefore, may appear over-indebted and facing
bankruptcy.[57] The consensus today is that Brüning's policies exacerbated the
German economic crisis and the population's growing frustration with
democracy, contributing enormously to the increase in support for Hitler's
National Socialist German Workers' Party"

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dialamac
> EDIT: I'm not sure why all the downvotes, maybe because it looks like I
> Godwin-ed the thread? I was just paraphrasing the rest of the wikipedia
> section:

Well in a thread about the re-emerging dominance of idiocy in silicon valley,
consider it more supporting evidence.

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batt4good
And it looks like California is planning on keeping an ever larger portion of
that oh so sweet founder IPO dough!...

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godzillabrennus
Good time to shelter in place in a tax haven now that your working remotely.

New Hampshire can be quiet lovely.

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onlyrealcuzzo
California is quite aggressive at taxing income from stock people were granted
while living in California.

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fiberoptick
Your comment is technically correct, but misleading.

In fact California specifically does _not_ tax ex-residents for income arising
from the disposition of stock acquired with ISOs, which is usually the way
pre-IPO employees acquire shares. This is true even if the ISOs were granted
for work performed in California.

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batt4good
You should look into the recent proposed bills that target exactly this. The
provision that made headlines was a wealth tax on $30MM personal wealth,
however it also includes enormous income tax hikes on anything above $1MM and
explicitly targets capital gains.

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jedberg
> however it also includes enormous income tax hikes on anything above $1MM

It's a 1% tax hike on income over $1M, 3% on over $2M, and 3.5% on income
above $5M.

I wouldn't call that enormous.

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batt4good
At rates like this, the gov't (federal and state) are collectively taking more
than half my income and still can't seem to function properly.

3% _is_ enormous on top of existing sky high CA numbers...

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octernion
still far below historical highs if you are being taxed at that marginal rate.

