OpenAI applies the same strategy, but they’re using their equity to buy compute that is critical to improving their core technology. It’s circular, but more like a flywheel and less like a merry-go-round. I have some faith it could go another way.
There are physical products involved, but the situation otherwise feels very similar to ads prior to dotcom.
That's capital markets working as intended. It's not necessarily doomed to end in a fiery crash, although corrections along the way are a natural part of the process.
It seems very bubbly to me, but not dotcom level bubbly. Not yet anyway. Maybe we're in 1998 right now.
I don't tend to benefit from my predictions as things always take longer to unfold than I think they will, but I'm beyond bearish at present. I'd rather play blackjack.
Not? Money is thrown after people without really looking at the details, just trying to get in on the hype train? That's exactly how the dotcom bubble felt like.
Things are worth what people are willing to pay for them. And that can change over time.
Sentiment matters more than fundamental value in the short term.
Long term, on a timescale of a decade or more, it’s different.
Nowhere near that level. There’s real demand and real revenue this time.
It won’t grow as fast as investors expect, which makes it a bubble if I’m right about that. But not comparable to the dotcom bubble. Not yet anyway.
I’ve made that mistake already.
I’m nervous about the economic data and the sky high valuations, but I’ll invest with the trend until the trend changes.
Capital markets weren't intended for round trip schemes. If a company on paper hands 100B to another company who gives it back to the first company, that money never existed and that is capital markets being defrauded rather than working as expected.
PE ratios of 50 make no sense, there is no justification for such a ratio. At best we can ignore the ratio and say PE ratios are only useful in certain situations and this isn't one of them.
Imagine if we applied similar logic to other potential concerns. Is a genocide of 500,000 people okay because others have done drastically more?
If you have a better measure, share it. I trust data more than your or my feelings on the matter.
That ultimately wouldn't be a big deal if the paper valuation from the trade didn't matter. As it stands, though, both parties could log it as both revenue and expenses, and being public companies their valuation, and debt they can borrow against it, is based in part on revenue numbers. If the number was meaningless who cares, but the numbers aren't meaningless and at such a scale they can impact the entire economy.