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htormey

It really doesn’t feel like a correction right now at least in the tech sector:

- The job market is unbelievably hot.

- I don’t see why any of the big tech companies will turn in outrageously bad numbers this quarter.

- Everyone I talk to is hiring.

- A bunch of people at startups that went public or are about to go public will unlock a lot of stock really soon.

Yet I still feel a bit nervous. I’ve been in the Bay Area since 2008 and I remember how fast the place cleared out after the last big crash. I could see some stocks taking a hit in the short term however I just don’t see what’s on the horizon that’s going to do in tech in particular.

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My view is that many companies in the US are over-funded because the fed stimulated the economy too much. Investors flocked to the stock market in 08, when there was no money to be made in bonds, and then the stock market got whipped up by more people joining the trend. Then it happened again when Trump got elected and investors thought republicans would be easy on businesses.

All that funding is being burnt by companies to grow and compete with each other, which is why you see an overheated job market. They also inflate the value of GAFA, because these companies spend a lot in software, hardware, cloud services and ads.

When interest rates go up and bond yields get better though, it's likely that investors will no longer fund companies as much as they used to (which is why I think we're starting to see a slowdown in stock prices). This slowdown in funding will cause companies to have some painful debt crunch, and start the bursting of the bubble...

Anyway, just my opinion

> I don’t see why any of the big tech companies will turn in outrageously bad numbers this quarter.

Really? You don’t see why FB may post a decline in users, after all the pushback they’re getting? Why Twitter might enter a spiral soon? These just seem impossible to you?

The rest of your comment seems like what people could easily have said in September of 1929. Not saying a crash like that is coming, but it literally means nothing that things are doing well today, it’s about whether the trajectory we’re on is sustainable in the long-term.

“Really? You don’t see why FB may post a decline in users, after all the pushback they’re getting? Why Twitter might enter a spiral soon? These just seem impossible to you?”

Not really sadly. I’ve been monitoring the App Store rankings through out all of the recent scandals. The only time the top 10 changed recently was due to March madness and that golf tournament thing. The main apps in the top 5 have remained social right through out.

Even in the social category, I didn’t see signal or any privacy related apps make it into the top 50.

I also bet that large portions of the public don’t even know Facebook own Instagram and it’s growing like crazy. Same with WhatsApp.

I can also see a scenario where any regulation that does occur, short of breaking up Facebook or google, benefits the incumbents. I don’t think they are gonna be broken up in the USA anyway due to the way anti trust law is written.

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