Monday , February 17 2020
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Tag Archives: IPOs

Beware Of Those Selling “Technology”

“3. And they said to one another, ‘Come, let us make bricks, and burn them thoroughly.’ And they had brick for stone, and bitumen for mortar. 4. Then they said, ‘Come, let us build ourselves a city, and a tower with its top in the heavens, and let us make a name for ourselves; otherwise we shall be scattered abroad upon the face of the whole earth.’” Genesis 11:3-4 (NRSV) Technology Technology can be thought of as the development of new tools. New tools enhance productivity and...

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10/4/19: Rewarding Reckless Risk Pricing, Again

Markets are supposed to be efficient. At least, on the timeline that allows to price in probabilistically plausible valuations of the firms. Markets failed to be efficient at the time of the bubble. And, it appears, they are back at the same game: As the chart above shows, share of IPOs issued at negative earnings (companies losing money) is now at the levels last seen during the height of the bubble. What can possibly go wrong?

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Throwing Money Into Tech Startups Will End In Tears

The tech startup boom has been one of the most important and visible economic “growth engines” of the past half-decade. The boom was spurred, in large part, by the success and excitement over Facebook, Uber, Airbnb, and similar companies, which led to a widespread search for the “Next Facebook” or billion dollar “unicorn” company. Unfortunately, the tech startup boom has devolved into a dangerous bubble as a result of record low interest rates and the trillions of dollars worth of liquidity...

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Supply (lack of ) Driven Bull Market

I had an interesting conversation with an economist friend this morning about inflation and excess capacity. He sees no evidence of excess capacity in the U.S. economy, including the service sector, where he cannot find, say, a plumber for hire to do some home improvements. We then moved on to an esoteric conversation as to why those inflationary pressures are not showing up in the official data. They do seem to be building in the pipeline, however. We concluded mismeasurement, archaic...

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