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America's Five Biggest Tech Stocks Lost $97 Billion Friday (yahoo.com)
An anonymous reader quotes CNBC:
The so-called "big five" -- Apple , Alphabet Class A shares, Microsoft , Facebook and Amazon -- lost more than $97.5 billion in market value between the close on Thursday and the close on Friday, according to FactSet, dragging the Nasdaq to its worst week of the year. Shares of Apple fell nearly 4 percent on Friday, while the other four companies fell more than 3 percent. For most of the day, only 3 stocks in the S&P 500 tech sector were in the green: IBM , Teradata and Western Union . Apple, Facebook, Amazon, Netflix, and Alphabet all traded more than 2 times their 30-day average volume... "They're just plain overbought," said David Bahnsen founder, managing director and chief investment officer of The Bahnsen Group, a private wealth management firm. "They are extremely stretched from a valuation standpoint."
CNN notes the drop occurred "after a Goldman Sachs analyst questioned this year's run-up in the industry's five biggest names." They also added that "The top five techs today account for 13% of the market value weighting in the S&P 500, even though they are only 1% of the companies in the index."
CNN notes the drop occurred "after a Goldman Sachs analyst questioned this year's run-up in the industry's five biggest names." They also added that "The top five techs today account for 13% of the market value weighting in the S&P 500, even though they are only 1% of the companies in the index."
Facebook Amazon Netflix Google
After some shuffling around and a name change, now FAAAM
Don't worry, they went up so much lately, a little pullback and profit-taking was bound to happen. Nothing goes up forever.
This is really just the fallout from the devastating news on Friday that Microsoft is closing up shop on Docs.com. It's madness, sheer madness I say! ;)
Anons need not reply. Questions end with a question mark.
It's all funny money anyway. Just know when to cash out.
“He’s not deformed, he’s just drunk!”
Why do people own stocks? There are three primary reasons:
1. Control.
The mindset that prevails now among tech companies, and especially those founded by Silicon Valley types, is that investors are a necessary evil to be controlled. So they issue special shares to themselves to ensure that no matter how many shares somebody else owns, they still have control. It's a giant middle finger to the average investor whom the Silicon Valley types have zero respect for. Why would you want to invest in a company that doesn't care about you or your capital? It's like paying for the privilege of being abused. So in the case of these tech companies control is essentially impossible which eliminates this reason to own the stock.
2. Dividends.
Another reason to own a stock is to have a claim to a share of the profits that are distributed periodically to the owners. Some tech companies pay a dividend and some don't but even those that do offer a relatively miserly amount compared to their profits and market valuation. A look at tech company balance sheets reveals huge war chests full of cash or equivalent short term liquid investments. Doesn't this money belong to the shareholders? Why do the tech companies need such large hordes of cash in what is essentially a low capital equipment expense business? Again, this signals a lack of respect for the shareholders.
3. Capital Appreciation.
The final reason to own a stock is to have a stake in a growing business that will, by virtue of the business becoming larger and more profitable, grow in value over time. However, in the case of these tech companies, the lack of control makes any liquidation event, even in the distant future, a theoretical impossibility during the lifetime of the founder and probably for some time afterward too since tech billionaires like to put their shares into charitable trusts for long term social engineering projects. These trusts will probably continue to monopolize these assets for decades after the passing of the founders. Where is the capital appreciation if nobody can ever get control and liquidate the stakes?
Given all of these factors, how is tech an attractive investment? It looks more like a vehicle for speculation to me, at least for the average investor.
All you have to do is look at the P/E ratios of the S&P500 to see that current stock valuations aren't based on fundamentals.
The PE for the S&P is about 25. That is a 4% ROI. Apple's PE is about 18, which is an ROI of over 5%. Ten year T-bills pay 2.5%. So unless you think interest rates are going to soar, stock prices look reasonable.
Amazon's PE is WAY higher (over 500) but Amazon is a growth stock. You don't buy AMZN for the dividends.
If/when rationality returns to the market, it'll be a bloodbath.
I have heard a lot of chicken-littles voice both of these opinions:
1. Robots/AI are going to steal all the jobs, and all the wealth will go to capital.
2. Stocks are way overvalued
If you believe both of these, you have some severe cognitive dissonance.
Disclaimer: I don't believe either of these things.
Lots of other tech stocks also got hit after big runups this year. Unless there's a war, it should just be a pause though.
We have low unemployment and rising wages. Cloud computing is still ramping up. Semiconductor companies can look forward to VR and AR, autonomous driving, 5G, AI, industrial automation, defense projects, video gaming, and IoT for above-GDP growth opportunities over the next 2-5 years and beyond. Network buildouts in the US for 5G, in China for better connectivity outside major cities, and eventually in India will be the future story for communication equipment makers.
Things are still running along nicely, but even the strongest runners need to take a rest sometimes.
Comparing stock valuations to an artificially-depressed and manipulated interest rate produces skewed valuations metrics. Naturally that's why the Fed has interest rates so low, to encourage such comparisons and thus more risk taking. But what's good for short-term boost to economic investment is bad for he investors' long-term results.
Comparing stock valuations to an artificially-depressed and manipulated interest rate
Right ... there is a vast conspiracy of the rich to push down interest rates so poor people make less money on their vast bond holdings. Whatever.
Interest rates are low because inflation is low, and higher interest rates would push us into ruinous deflation. There would be nothing "natural" about that.
Amazon has been a Growth stock for 20 years. The reality is that is a speculative stock that has never been pressured to earn a profit.
If Amazon has to actually generate real profiles, you can beat Amazon's stock price would crash spectacularly
After nearly a decade of QE, and with prime interest rate next to zero, there's a lot of "hot money" floating around in search of "investment" opportunities. International corporations have a couple trillion (collectively) parked in off-shore tax havens -- against which they can borrow at borrow at rock-bottom rates, and then use that money to buy-back their own stock and pad the already obscene bonuses of their fat-cat CEOs.
This is just another bubble, pumped up by the shameless, libertine excess of the FED's printing press. Look for more "volatility" like this in the future as the bubble nears its bursting point.
XML is like violence. If it doesn't solve your problem, you're not using enough of it. --AC
Have they tried the back of the couch?
Or if the weather was different they might have worn a different coat.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
Silicon Valley learned from older companies what happens when you let shareholders run the show entirely. Corporate Raiders, leveraged buyouts, asset stripping, golden parachutes (used to counter raiders, now abused by management).
Shareholder driven mean short term only, long term profitability be dammed.
Now, has tech taken it too far in the other direction? Probably. As for the warchests, no, those do NOT exclusively belong to shareholders. Shareholders are only one of many stakeholders in a company, along with management, employees, and customers. Investor money is a necessary but NOT sufficient ingredient for a company. If shareholders direct the company in a way that you lose all the productive employees, thereby killing the company, what was the point?
Let me sum up your post. "It's different this time."
The 8 years of scapegoating you're referring to were all the liberals blaming Bush for everything that happened under Obama's watch.
- The economy, years 0 - 8
- The Patriot Act, extensions, and expansions, years 0 - 8
- The murder of countless innocents in several farcical wars, years 0 - 8
- The expansion of pervasive and invasive spying programs along with the erosion of liberties, years 0 - 8
- The continual undermining of law and abandonment of duty with regards to border control, years 0 - 8
- The murder of an American citizen via drone strike
- The huge spike in health care premiums after the "Affordable Care Act" was passed
But hey, keep on trucking, retard.
Partisans like you, with your pitiful talking points taken directly from party heads, are exactly why America will never be great again.
Democrats, Republicans, talk about getting behind a bunch of idiots. It was hilarious watching a literal election between a giant douche and a turd sandwich.
And you idiots go "don't blame me! I voted for giant douche!"
Congratulations. Enjoy your welfare cheque.
Me? I'd have said it was the Trump Euphoria starting to wear off.
It'll happen.
No sig today...
News at 11.
AAPL: 5% off split adjusted all-time high, set less than 1 month ago
AMZN: 3.8% off split adjusted all-time high, set less than a week ago
FB: 4% off split adjusted all-time high, set same day
GOOGL: 3.8% off split adjusted all-time high, set less than a week ago
MSFT: 3.5% off split adjusted all-time high, set less than a week ago
No drop more than 5% and four of five set new all-time highs this week. What part of this does not look like profit-taking?
Comparing stock valuations to an artificially-depressed and manipulated interest rate
Right ... there is a vast conspiracy of the rich to push down interest rates so poor people make less money on their vast bond holdings. Whatever.
Interest rates are low because inflation is low, and higher interest rates would push us into ruinous deflation. There would be nothing "natural" about that.
While I won't say for certain that there is a conspiracy, lower income people have had the rug pulled out from under them to invest for retirement. With interest rates being essentially 0, it does indeed become a tad difficult. I have a sneaking suspicion that suicide will become the new retirement plan for many. I have money, no problem for me. But I also understand math.
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
Except they have earned a profit for two straight years, every quarter.
Holy fuck! That is the best performance ever by any company ever. Give Bezos a Medal of freedom for doing something no business has ever done before! I'm crying tears of joy, as the US is now set for the rest of time!
The shepherds did so well protecting the flock that the sheep no longer believed that wolves existed.
bottom line with investments...shit happens...get over it and move on.
"America's Five Biggest Tech Stocks Lost $97 Billion Friday"
Ha ha...err, I mean, "OMG, that's terrible!"
You mean Mark Zuckerberg is worth a billion less than he was yesterday? Can we take up a collection for the poor guy?
Just cruising through this digital world at 33 1/3 rpm...
lower income people have had the rug pulled out from under them to invest for retirement.
The biggest investment for most non-rich people is their home. Low interest rates mean cheap mortgages. You can get a 15 year for 3.5% and build equity fast.
Just pray that our President doesn't start reading /. believing it to contain "real news". Twitter may fallover.
Wait? What?
Google is down to levels not scene since May?!
--Q
Who said anything about a conspiracy? The risk of a deflationary death spiral ended years ago yet here we are at record-low interest rates.
Step 1: Short major tech stocks to the tune of billions with accounts obfuscated through a beach of shell companies.
Step 2: Your analyst "Has a press release noting that they are overvalued"
Step 3: Wipe with thousand dollar bills for the rest of your days.
You've got something backward here. Inflation forces you to use it or lose it, because its value is going down. Deflation encourages you to hold on to it because you can get more use out of it later than you could now.
-Forrest Cameranesi, Geek of all Trades
"I am Sam. Sam I am. I do not like trolls, flames, or spam."
The fear of deflation is based on a fallacy.
br. If the same stuff over time cost a smaller and smaller percentage of peoples incomes, that would almost be like they made more money, and we cant have that... down with deflation!
"His name was James Damore."
Or you could simply build a computer for yourself and install macOS on it anyway, because fuck Apple and their expensive, weak-ass hardware options.
#DeleteFacebook
Shareholders are only one of many stakeholders in a company, along with management, employees, and customers.
Irrelevant. Management and employees are paid according to contract for their services, they have no further claim on the assets of the corporation. The assets belong to the owners of the corporation, which in the case of a publicly traded corporation are the stockholders. The customers are free to buy the products or services of the corporation or not. Likewise, they have no legitimate claim on the assets of the corporation simply by virtue of their being customers.
If shareholders direct the company in a way that you lose all the productive employees, thereby killing the company, what was the point?
Which is why intelligent shareholders don't generally do that. However, it is their right to do so and sometimes the right move is to liquidate or sell the company. In such cases, without shareholders asserting their rights as owners, you'd get zombie companies full of bad debts and propped up by the governments. Indeed, this is exactly what happens in many countries and the whole society suffers for it, whether they own shares or not.
Exactly. All that these people are is brainless felchers. They are the same people who puff up their chests and crusade about the "Obama recovery." And to this day, we are still somehow in some sort of recovery. I mean, a decade later after a crash which led to a "recession," we are STILL in a recovery. And Obama personally should take credit because all presidents, sorry, Presidents have some "God-given right" to a "legacy" which still makes no sense to me. These guys are hired to do a job of managing a country, and they are treated like some sort of a king or a dictator. Eighteenth century France, anyone?
So in reality, you have an idiot from Texas who rode his daddy's coattails to become a figurehead. You have a bunch of truly evil men like Cheney, Ashcroft, and Guiliani running the show. They take off where the Clinton regime left off with deregulations. The repeal of Glass-Steagal happened under Clinton. Larry Summers to this day laughs at destroying the middle class, and he is the guy that they keep pushing for, oh, say Treasury Secretary or Private Federal Reserve President. The bubble was pumped, pumped, and pumped under Greenspan, the useful idiot Bernanke inherited the mess, and when things were REALLY hairy a few years ago, they threw a woman into the mix to throw a woman into the mix. The past five years has been a complete and utter house of cards.
Everything from closing the market due to "technical difficulties" right as there is a crash and it is hockey sticked right back up after the servers "come back online" to the naked short sales of precious metals on the COMEX and FOREX reeks of fraud. And getting back to the point of recovery, there NEVER WAS A RECOVERY. There was a rebound where a few jobs came back here and there and people started placing orders again. People resumed hiring. But what was once a 180k/year job is now a 100k/year job, skilled workers who should be advancing the nation are instead stuck working multiple part-time minimum wage jobs, and those of us who are fed up with it (like me at 31), are just selling everything that they own and coasting by because working 100-hour weeks for $60k/year just isn't worth it. There is no way to grow out of it. The system is rotten. The petrodollar is the world's largest ever scam, and giant corporations run everything.
if some of the non-rich are helped despite skyrocketing prices, the wealthy make fortunes that will last for generations since the properties aren't their homes and they can buy at a large scale and more importantly SELL before the music stops
I have heard a lot of chicken-littles voice both of these opinions: 1. Robots/AI are going to steal all the jobs, and all the wealth will go to capital.
Well, AI took the jobs of stock analysts, and automatically sold a lot of high tech stocks because some cash-in trade triggered that.
Of course news about a fake are Fake News.
Just cause Hillary didn't win doesn't mean that Goldman Sachs is done screwing with the market. Those guy's are just going to have to cough up the cash to keep them happy. Or volatile stocks will stay volatile.
Well, considering they are running the Trump administration's financial branch, that's no surprise. Despite what Trump said about them during the campaign.
Of course news about a fake are Fake News.