Lavery

The capital gains / income tax rates have only a minor impact on the weight of growth in valuation models. One way to see this without getting to technical: there are a number of (very large) institutional investors that pay no tax at all (university endowments, charities, etc). If what you're saying is true, untaxed investors would have radically different allocations than similar taxed investors. That's not the case.

Just to take issue with one piece of this, the crash requirements do need to compete with commercial aviation, because in the customer mindset they will.

Probably parents realizing their children were making in-app purchases beyond what they (the parents) were aware of, and charging them back as unauthorized use. The cc processors pass that on to the merchant, and will drop them if there are too many. Likely Roblox just reached some critical mass where they couldn't sustain it any more.

There are two other reasons bike lanes don't have the kind of demand induction properties that roads do:

-Bike lanes (and ultimately, bike destinations) have way higher humans-per-square-foot of road / parking lot density than cars lanes. The throttling mechanism on behavior for the car example is ultimately drive time, and new lanes quickly become capacity constrained (first at the interchanges; later at the parking; last in the lanes themselves) in a way that slows ultimate travel back to the indifference equilibrium. The equivalent for bikes tolerates a way higher flow of humans.

-Induced demand for cars is in part a function of the fact that you can (up to a point) drive at any speed, meaning that if roads are added that support commuting in from 30, 40, 60 miles away, that can be a doable commute. There is no amount of development that will create a 60 mile bicycle commute. Here, the demand induction mechanism with travel lanes and housing is reversed: you need convenient housing to drive the demand for bike lanes.

Lots of comments here on the causal side of elite production, but just to float an alternate possibility:

This could just as easily be suggesting that "overproduction" of elites is due to, some two decades prior, a creeping sense among the populace of nascent but growing inequality and increased stratification? Or put differently, "Grandpa worked in the plant and made a good life for himself, and I work in the plant and make a good life for my family too, but I see the writing on the all and am going to make certain that my son or daughter becomes a [lawyer/banker/software person/etc]". And the instability today is just that initial rising inequality reaching fruition.

Something like that seems much more likely to me, that creeping change exists that is palpable at the individual level, and expressed through the emphasis given to the next generation.

>It's surreal to see people minted with money for life and yet deliver so little value. That sort of arbitrage usually only happens on Wall Street.

This must be a joke? The multi million-dollar exit with zero actual earnings is an almost uniquely tech phenomenon. There are Wall Street-ers that earned high pay for generating high earnings that many years later were found to be value-destructive, but at least at the time they were paid, they were cash-generating. That Wall Street jobs paid so much was because comp was structurally a function of cash generated.

I read a study a while ago arguing that reactor cost was as expensive as it is because nuclear plants are so large, complex, and infrequently built that each project is essentially bespoke.

This ignores the fact that everywhere (including countries where wealth taxes are implemented today), there is a floor below which the tax does not kick in.

Turmoil, yes, but internalized to the corporations impacted. One of the major impacts of the financial crisis a decade ago was the massive increase in private equity ownership of real estate. Groups like Blackstone (BX), the largest residential landlord in the US, may take a hit. Not covered in the article (but referenced elsewhere on HN lately), you're seeing even worse trends in retail-focused commercial mortage backed security portfolios. REITS like Simon (SPG, a mall operator) have been cut in half since pre-COVID.

Your question, though, is presumably around whether we'd expect problems with systemically important banks. Highly unlikely, for two reasons:

First, regulatory changes to their capital structures largely prevent them from holding things like CMBS on their balance sheet unless they reserve significant amounts of capital against it. This is what facilitate the rise of private equity landlordship: banks exited the business.

Second (and this has, largely, already happened) the Fed and other central banks learned their lessons well, and were swift and comprehensive about backstopping the financial markets.

Related question: What's the tech here that this can be accomplished (streaming data via satellite) without spectrum? Spectrum assets are some of the most valuable assets in the US (and are owned by Verizon et al). Satellite phone networks (LightSquared is the big one) have been stymied in the past by unavailability of spectrum and US Govt. concerns about interfering with GPS.

Is that not a problem in this case?

Sorry, wrote that quickly and wasn't super clear. What I meant was ranking. The S&P 500 is what's called a "cap-weighted index", where companies are ranked 1 through 500 by market capitalization, which is share price times the number of shares outstanding. Share count isn't meaningful, because (generally) increasing share count on the same company will just decrease price, and vice versa.

In most cases a company lifecycle is like, we launched a company, it's private for a few years, then it goes public. Either shortly before going public, but maybe a few years after, it becomes profitable. It then grows and grows etc, and joins the S&P by virtue of its size getting larger than the 500th-ranked firm already in the S&P ("size" here is market cap).

Tesla is different, because Tesla went public and was unprofitable, then got ~big and was still unprofitable, and now for (largely unknown) reasons would be, if it were included, the 10th largest company in the S&P, but is still unprofitable. They may cross that threshold later this month, but this process--joining the S&P at rank 10--is highly unusual.

One other note on Tesla in particular, that I think the other comments here have largely missed:

Tesla is--and has been for a while now--the largest market cap company that is not included in the S&P 500. To be considered for inclusion in the S&P, companies must show at least 4 consecutive quarters of profitability.

Tesla's next earnings release (which is in roughly two weeks) has the possibility of being that fourth consecutive quarter. S&P isn't then required to include them, but it seems likely they would. Once they did so, index funds and ETFs that benchmark to the S&P (which is the biggest single benchmark of such funds, by a lot) would then be forced to buy the stock (at whatever price it traded at the time) in proportion to its ranking in the index. At one point today, Tesla was top-10.

Clearly this is a bit of a conspiracy theory, but this type of behavior (bidding up shares in front of index inclusion) isn't that unusual. What is unusual is that Tesla has gotten so large prior to inclusion: stocks normally join in the 500s - 300s or so, and grow from there.

  #1 Interest rates are as low as they have been in an extremely long time, people/institutions want higher returns so they are putting money into vehicles with higher returns(stocks).

This isn't wrong, but it's also worth noting that (regardless of return preference / risk tolerance), higher stock prices are also, partly, a consequence of low interest rates. Stock markets are many things, but one thing they are is a discounting tool, and the discount rate you use is informed by market rates elsewhere. If interest rates are zero, simplistically, equities are the sum of their related cashflows for the next indefinite period of time.

(I'm aware there are other premia I'm not including, but, simplistically)

>Amazon is an formidable acquirer and probably the only big-tech that knows how to squeeze from their M&A activity.

Not really sure how you're using "squeeze" here, but Instagram and Whatsapp were both, with the benefit of hindsight, phenomenally successful acquisitions.

Unfortunately, the volcanoes have thus far resisted public pressure to reform.

A bunch of other folks have replied to different pieces of your comment, but I just want to point out that nearly all major index/ETF providers have halted rebalancing + reconstitution.

House of Leaves is a great novel. Will feel like a completely fresh take on narrative form.

Infinite Jest is also great, if you haven't read it. It gets a lot of bad press mostly due to being fetishized by a particular type of insufferable person. The book has its flaws, but is a great piece of writing and (depending how old you are, where you are in life, etc) may offer a different lens. Also, the writing is excellent.

Other states have tried to go before Iowa in the past--being the first state to vote has significant benefits to the local economy, as campaigns spend ad dollars, hire local teams, deploy ground efforts that eat in local restaurants, etc.

In the past, the parties have essentially prevented those states' election date moves. That stance could change.

There're like three sub-threads to your comment now of people getting it wrong. What you are describing is Gross Bookings. If you don't believe me, Uber's quarterly financial results are here and you can see for yourself.

https://investor.uber.com/news-events/news/press-release-det...

The cost to Uber users is not the same as revenue to Uber corporate. Uber corporate revenue is net of driver pay.

You seem to be suggesting there's a media bias here. I think probably an honest answer to your question is "Tesla has all of these advantages in data gathering, but is not operationally equipped to use them."

Changes to circuit board vibration, to pick one of your examples, relies on tight control of manufacturing as a process. Model 3s had such basic issues as leaks in door seals--does it seem like they have tight control of manufacturing?

Manufacturing prowess aside, this forum has a pretty big collective eye roll at management and consultants and business 101 topics generally, but when you talk about things like "getting photos from a failed part direct to an engineer" you need to be asking whether those departments are set up to communicate with one another.

Maybe that's reasonable in private markets, but Logmein was a public company (LOGM). Valuations and multipliers for public equities are the consensus of a set of investors who buy and sell the stock all day. Anyone who wanted to take the money and run could choose to do so between the hours of 9:30 and 4 EST for the last decade.

The countries you cite are able to have a minimum wage of zero because it's coupled with a robust social safety net (sometimes along with other backstops--Norway, for instance, is heavily unionized). This pairing is important, and is absent in the US.

On a forum so enmeshed in tech and startup culture as this one, yours is a particularly hot take.

Ethical considerations aside, one of the other drivers of this is the origin of some of the money involved here. Most of the largest sovereign wealth funds globally are the result of money generated by resource extraction: Norway, Abu Dhabi, Kuwait, Saudi Arabia (directly and via Aramco), Qatar, etc. For these names, holding stocks that pose a climate risk is buying oil with oil dollars. Without intentional divestment of oil, coal, and other climate names, they are essentially levered long. Excluding these from their holdings is just prudent investment.

Just an observation on your comparison here, I think you'll find that the realities of the legal and medical profession are radically different from one another. Medical school limits supply because the salaries (and therefore, quantity) of medical residents are paid by the US government, and so the number of medical schools and graduates remains fairly static year to year. Law school famously has no such restriction, and so the number of law schools in the US has exploded in the last 20 years, and the outcomes for the average law school graduate have worsened dramatically.

It's reasonable to assume software development will follow the legal path (or similarly, of business grads who aspire to careers in finance) over time: a few graduates of elite universities, with some combination of greater ability or prestige-signalling degrees, will land elite jobs at global firms making six figures directly out of school, while most earn a small fraction of that elsewhere. In the late '00s / early '10s you had a confluence of events--the settlement of anti-competitive hiring case against the major industry names, a boom in revenue for tech companies, quantitative easing causing a global hunt for yield and explosion in VC, and other factors--leading to a scenario where in the span of a year or two, tech jobs went from "not on most college kids' radars" to realization that this was a well-compensated career. In 07, my top 30 university nearly shuttered its CS department, which would be unthinkable now. That kind of rapid change causes a shortage. It won't last forever.

You're missing the point in a way that brings to mind a great Brian Eno quote. "The first Velvet Underground album only sold 10,000 copies, but everyone who bought it formed a band".

No question that played a role, but it's not like the settlement happened in 2011 and then salaries immediately corrected to the current levels and stayed. This has been a steady climb upwards.

In a lot of ways, the current expression of the tech sector (certainly from a valuation standpoint) and the startup scene particularly feels like a consequence of the response to the financial crisis. Critics of the Fed spent years loudly worrying about how the various QE programs were going to drive up inflation. Of course, this didn't materialize, at least as measured in the usual basket of goods and services. What did happen was a broad and sustained inflation in financial assets / collapse in yields that drove everyone further out along the risk curve, with VC being the furthest point out.

The tie in to inflation is darkly amusing the because the classic precursor to inflation is wage growth. Broadly, there hasn't been any--except in the tech sector, which has seen a veritable explosion in pay from where it was a decade ago.

Part of the trick to convincing people to invest with you is having a significant amount of your own money in the fund. So that's one hurdle here. It's possible to raise enough that your management fee renders irrelevant whatever you might lose trading your own money, but at that point you're in big league hedge fund scale anyway and will be very tightly scrutinized.

Also, losing client money is just as emotionally difficult and stressful and guilt inducing--maybe more so--than losing your own for anyone with a half normal sense of responsibility and fiduciary duty.