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The Tech Sector Is Leaving the Rest of the US Economy In Its Dust (theverge.com)
Yesterday afternoon, the S&P 500 closed at a record high, and is up over $1.5 trillion since the start of 2017. "And the companies doing the most to drive that rally are all tech firms," reports The Verge. "Apple, Alphabet, Facebook, Amazon, and Microsoft make up a whopping 37 percent of the total gains." From the report: All of these companies saw their share prices touch record highs in recent months. This is in stark contrast to the rest of the U.S. economy, which grew at a rate of less than 1 percent during the first three months of this year. That divide is the culmination of a long-term trend, according to a recent report featured in The Wall Street Journal: "In digital industries -- technology, communications, media, software, finance and professional services -- productivity grew 2.7% annually over the past 15 years...The slowdown is concentrated in physical industries -- health care, transportation, education, manufacturing, retail -- where productivity grew a mere 0.7% annually over the same period." There is no industry where these players aren't competing. Music, movies, shipping, delivery, transportation, energy -- the list goes on and on. As these companies continue to scale, the network effects bolstering their business are strengthening. Facebook and Google accounted for over three-quarters of the growth in the digital advertising industry in 2016, leaving the rest to be divided among small fry like Twitter, Snapchat, and the entire American media industry. Meanwhile Apple and Alphabet have achieved a virtual duopoly on mobile operating systems, with only a tiny sliver of consumers choosing an alternative for their smartphones and tablets.
I'm going to cash out my stock options and ESPP as soon as they vested. Tax penalties be damned. I'd rather lose 20% of the value to taxes than 80% of the value to a crash.
Digital advertising isn't an industry.
At best it is a digital parasite.
Here you have your explanation. A decent sector does not have any frigging "magical" dust. Look at tech, where we have good old magic smoke.
USA culture is obsessed with the 'new'. In fact, 'new' and 'free' are the two most-liked words in the English language (in the USA.) It should be no surprise that consumer spending behavior would gravitate towards what's novel, which necessarily (eventually) requires new technology. An increasing proportion of our entire economy is being automated, with widespread predictions that eventually, our ENTIRE supply-side economy will be automated. This automation requires, again, new technology. Therefore, tech companies are displacing older companies; you thought you wanted X good or service, but it turns out that new tech makes X irrelevant (cars vs. buggy whips), or Y alternative (electric cars vs. ICE) so cheap it's preferable to what you were planning on using.
Corruption is convincing someone that the selfless ideal is the same as their selfish ideal.
The #1 cost of most things are the raw materials needed to product followed by the labor (and their benefits). Tech needs almost nothing to produce since it includes software and even then needs a fraction of the employees of most sectors. Tech has amazing ROI because you just plain don't need to invest very much.
The trouble is that a lot of tech is either useless (Twitter) or evil (Uber).
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conflates the "stock market" with "the economy"????
Oh, right: journalists. I'd be unhappy as hell if my kids became lawyers, but kill the one that becomes a journalist.
"I don't know, therefore Aliens" Wafflebox1
"Meanwhile Apple and Alphabet have achieved a virtual duopoly on mobile operating systems, with only a tiny sliver of consumers choosing an alternative for their smartphones and tablets. "
There isn't exactly an "alternative" when the companies behind the chipsets and phone designs refuse to release proper sources for a third or dare I say fourth option. If you are dependant on proprietary drivers / blobs for Android as everybody is you don't really get a choice as a manufacturer.
The closest thing we have to hope for change is the modular computing standard EOMA68. It'll probably never be incorporated into a phone design, but it's smaller predecessor may be. With it we might maybe have a chance to develop an alternative design for some sort of communications device that isn't dependant on Android. The first EOMA68 card will use an AllWinner A20 dual-core chip and 2GB of ram. The next card is going to build on a Rockchip quad-core SoC with 4GB of ram.
https://www.crowdsupply.com/eoma68
* EOMA68 was sponsored by ThinkPenguin and helped make this project into what it is
... the ratio of profit-to-cost becomes very large. FACEBOOK, TWITTER, APPLE and GOOGLE produce nothing of special value . And sell dear to emoto-centric droolers! Even Rogero-St. hoes fuck you better.
Still no tech jobs for Americans.
While I agree that the first 2 are of no value, Apple and Google make tangible useful products. As someone else in the topic states, there is a duopoly on mobile phones between the two. They both make products for the desktop and mobile which dig into the long held MS monopoly.
That is not to say they don't have crap too, but definitely not a Facebook or Twitter. If those two companies stopped receiving free advertising from people, competing products would put them out of business.
-The wise argue that there are few absolutes, the fool argues that there are no probabilities.
Daniel Bell. 1973. The Coming of Post-Industrial Society: A Venture in Social Forecasting. Basic Books, New York, NY.
Remember the nasdaq / dow split just before the dot.com bubble imploded?
Twitter overvalued by $19.63 per share
Most electronic component vendors are current at or over capacity, which is starting to result in longer lead times for components that aren't in stock or not on order. In general this should bode well for the world economy, but with no other markets clearly following I'm unsure where it's all going. Thoughts?
Seriously, did they just dig this article out of 1999?
even when I was a kid they knew they were doomed. We met with people to talk about their work in high school and the Journalists all told me to steer clear of their profession. It would help if we didn't let one guy (R Murdoch) buy up 90% of the news papers so he could push his agenda through them. I mean, what's even the point of buying a news paper when it's nothing but the usual pro-corporate blather. Muck racking is what made journalism worth paying for. Not that the powers that be would let that fly...
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
I had no idea that industry could grow quickly AND slowly at the same time.
Ezekiel 23:20
What happened to the scenario where the traditional industries buy and contract technology from the tech sector to improve their efficiency and transform their business processes? Were the traditional industries too slow to change so that the tech industry lost it's patience as the low-margins didn't feed the engineers?
I don't know if it's true
this is the only thing you said that makes any sense
0.7% in things that are more important.
yes exactly film and entertainment are among the "more important" industries
No one remembers the bubble
The reason those stocks are increasing is that millions of people have their 401K investing in "tech stocks" The people who manage some of those get a billion a week that they are obligated to invest before the next billion shows up next week. The result is the tech stocks are over valued and the price keeps going up as the game continues.
This gets worse when they go to prove their investment works. Say they bought a billion in shares in GOOG 5 years ago at $300. They can sell them this week for $950 or so they make a 2.16 billion profit which they can keep for weeks since it was a result of a sale of stock. Next week they dump another billion into GOOG stock at say $1000 and they other 3.16 billion from last weeks sale may go to something else like IBM and MSFT just after the investment firm reports wonderful profits.
There is a class of investment in the UK that is limited to something like 60 tech companies and there are retirement funds that are limited to those 60.
The high speed computer traders know this and have been gaming the system for decades.
Remember 2001. This is just the next stock market bubble. It will pop. just like the last one did.
The symptoms are the same, too. Crazy startups (especially in Silicon Valley), getting $millions in funding, and yet anyone looking from a distance can see that they have zero chance of ever making money. Stupidly high market values for companies making thumping losses every quarter. For whatever reason, it all turns into a lottery: this little startups hoping some big boy like Google or Apple will buy them out. Even stupider: the big companies keep doing exactly that.
Enjoy life! This is not a dress rehearsal.
These things are produced by non-American immigrants, while US worker produce crappy cars and appliances that nobody else than Americans buys.
Heck, even now you can't get only a handful of US car models for driving on the left, like several billion people need.
"A majority of Millennials, ... do not invest in the stock market, ... just 1 in 3 Millennials have money in the stock market."[1]
"About half of Americans (52%) say they invest in stocks."[2] "These figures include ownership of an individual stock, a stock mutual fund or a self-directed 401(k) or IRA."[3]
"As of 2013, the top 1 percent of households by wealth owned nearly 38 percent of all stock shares, according to research by New York University economist Edward Wolff. Indeed, nearly all of the stock ownership in the U.S. is concentrated among the richest. According to Wolff's data, the top 20 percent of Americans owned 92 percent of the stocks in 2013. Put another way: Eighty percent of Americans together owned just 8 percent of all stocks."[3]
- - -
[1]: Why so few millennials invest in the stock market, *Business Insider*, Jul 6 2016, http://www.businessinsider.com/why-so-few-millennials-invest-in-the-stock-market-2016-7
[2]: Just Over Half of Americans Own Stocks, Matching Record Low, *Gallup*, April 20 2016, http://www.gallup.com/poll/190883/half-americans-own-stocks-matching-record-low.aspx
[3]: While Trump Touts Stock Market, Many Americans Are Left Out Of The Conversation, *NPR*, March 1 2017 , http://www.npr.org/2017/03/01/517975766/while-trump-touts-stock-market-many-americans-left-out-of-the-conversation
"The Tech Sector Is Leaving the Rest of the US Economy In Its Dust"
Uh, more like The Tech Monopolies and Mega-corps are leaving Everyone In Its Dust.
These tech giants are crushing even other tech companies.
And of course let's not forget about the political strings they've pulled to stay on top. I wonder how well the "Tech Sector Five" would have performed had they been forced to play more by the damn rules and actually do things like pay taxes, and not hide 99% of their revenue in some fucking tax haven somewhere.
Wages have been stagnant for almost 10 years even for the A players and unicorns.
There are slightly higher paying jobs (5-10%) you could take but they require twice as much work if not more. Not worth it especially if you have a family. We're still due for a correction because of the recession like everyone else.
We'll make great pets
The ever-present problem of some sectors of the economy never getting more productive:
https://en.wikipedia.org/wiki/Baumol%27s_cost_disease
Not as many but jobs ARE coming back. You also forget all of the jobs around keeping a factor running independent of the production that are good as well.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
Guess what, the Dow Jones and Nasdaq stock indexes are making a sharp drop today as investors are worrying if President Trump's reforms are boosting or bursting the U.S. economy.
http://www.bbc.com/news/business-39953112
See subject. Also, volatility works both ways. Today's example:
SPY: -1.75%
GOOG: -2.46%
AAPL: -3.40%
FB: -3.30%
MSFT: -2.82%
AMZN: -2.32%
A family member had this happen with Intel stock during the first bubble around 2 decades ago. Held onto it too long to try and reduce tax liabilities and instead ended up with a fraction of the money and a decade of tax credits since it qualified as losses (I don't understand how all that stock stuff works.)
Long story short: I've heard similiar situations from multiple other people in the past 10 years or so. This is not a market to ride through if you expect to need that money soon or at all, and taking the loss now is more likely to ensure you aren't taking a much bigger loss later.
While market valuation may a gauge of the economic health/activity, it is not the economy.
Count St. Germain