Banknotes stuffed in a mattress is looking better and better.
Works right up to the moment that serious debasement of the currency (aka inflation) sets in. Which, the idiots at the top of this administration being how they are, seems a distinct possibility.
Might be better to put your money into reconfiguring your back yard (if you have one) into a big vegetable garden.
2 weeks ago
lj, I suppose it depends a lot on the behavior of the companies one is familiar with. I've certainly seen (and worked for) some that practice "devil take the hindmost" capitalism.
But I've also worked for companies which thought being a good person and a good citizen was important. And seen a lot more of them. Plus, of course, their owners and managers were bright enough to realize that their people were what kept the whole thing running.
2 weeks ago
It’s not like there are some tiny companies, hidden in the shadows, that are somehow ‘doing capitalism right’.
Actually, I think there are. Not just tiny ones either; medium and moderately large ones, too.
The behemoths get all the attention precisely because they are so big. As you say, a handful of them make up half the NASDAQ. But by numbers, as opposed to simple market capitalization, the vast majority not only do more business, they employ, in aggregate, far more people.
And they survive by doing capitalism right. Not "right" as a lot of economists seem define it. They take care of their customers and they take care of their people. Without screwing over either in pursuit of a tiny fraction of a percent better numbers. And their executives don't make tens (or hundreds) of thousands of times as much as their average employees.
2 weeks ago
What kills me is that this is basically capitalism 101 and the Chinese are proving to be a whole lot better at it that the US.
Say rather that the Chinese are a lot better at it than enormous Silicon Valley firms. Which is to say, firms that so dominate their niche that they no longer have to pay much attention to competition. If you are Google or Microsoft or Amazon, you've got money to burn. So why not spend some of it on whatever shiny object has caught your biggest shareholder's eye?
Expect them to eventually, possibly sooner rather than later, discover why not. Although, if they can (apparently) afford to pay their CEOs hundreds of millions per year, maybe not.
2 weeks ago
Nvidia designs chips. All of their chips are fabricated by TSMC in Taiwan.
Another potential issue here. If China decides to forcibly reunite Taiwan, all that chip production is no longer secure. (Even making the heroic assumption that the various fabs are not severely damaged or destroyed.)
That would, I suspect, bring AI expansion to an abrupt halt. With obvious massive disruption to any business (not just AI providers) which has reorganized and restructured their operations to depend on it.
2 weeks ago
the software industry as a whole is all-in on AI (LLMs in particular).
makers are trying to stuff it into every nook and cranny they can find.
As noted, the costs are enormous. So using AI everywhere is the only prayer of actually making any money from it.
And for non-AI software companies, it's a matter of not looking like they are less than cutting edge. It's folly, except in a few narrow cases. But here instinct is powerful in the industry.
2 weeks ago
Brighter minds than mine will surely chime in to explain why this is not a matter of concern.
I think what you mean is, more credulous minds than yours.
At current valuations AI would have to bring in $400 per year per US resident for the AI companies to produce a decent return on investment. Which isn't happening in the foreseeable future.
"Bubble" is exactly what we're looking at. The question is when, not whether, it will pop. And how big an impact that will have on the economy overall. Personally, I'm going nowhere near stock in any company which is big into AI. But then, I've been avoiding bitcoins like the plague, too.
Banknotes stuffed in a mattress is looking better and better.
Works right up to the moment that serious debasement of the currency (aka inflation) sets in. Which, the idiots at the top of this administration being how they are, seems a distinct possibility.
Might be better to put your money into reconfiguring your back yard (if you have one) into a big vegetable garden.
lj, I suppose it depends a lot on the behavior of the companies one is familiar with. I've certainly seen (and worked for) some that practice "devil take the hindmost" capitalism.
But I've also worked for companies which thought being a good person and a good citizen was important. And seen a lot more of them. Plus, of course, their owners and managers were bright enough to realize that their people were what kept the whole thing running.
It’s not like there are some tiny companies, hidden in the shadows, that are somehow ‘doing capitalism right’.
Actually, I think there are. Not just tiny ones either; medium and moderately large ones, too.
The behemoths get all the attention precisely because they are so big. As you say, a handful of them make up half the NASDAQ. But by numbers, as opposed to simple market capitalization, the vast majority not only do more business, they employ, in aggregate, far more people.
And they survive by doing capitalism right. Not "right" as a lot of economists seem define it. They take care of their customers and they take care of their people. Without screwing over either in pursuit of a tiny fraction of a percent better numbers. And their executives don't make tens (or hundreds) of thousands of times as much as their average employees.
What kills me is that this is basically capitalism 101 and the Chinese are proving to be a whole lot better at it that the US.
Say rather that the Chinese are a lot better at it than enormous Silicon Valley firms. Which is to say, firms that so dominate their niche that they no longer have to pay much attention to competition. If you are Google or Microsoft or Amazon, you've got money to burn. So why not spend some of it on whatever shiny object has caught your biggest shareholder's eye?
Expect them to eventually, possibly sooner rather than later, discover why not. Although, if they can (apparently) afford to pay their CEOs hundreds of millions per year, maybe not.
Another potential issue here. If China decides to forcibly reunite Taiwan, all that chip production is no longer secure. (Even making the heroic assumption that the various fabs are not severely damaged or destroyed.)
That would, I suspect, bring AI expansion to an abrupt halt. With obvious massive disruption to any business (not just AI providers) which has reorganized and restructured their operations to depend on it.
the software industry as a whole is all-in on AI (LLMs in particular).
makers are trying to stuff it into every nook and cranny they can find.
As noted, the costs are enormous. So using AI everywhere is the only prayer of actually making any money from it.
And for non-AI software companies, it's a matter of not looking like they are less than cutting edge. It's folly, except in a few narrow cases. But here instinct is powerful in the industry.
Brighter minds than mine will surely chime in to explain why this is not a matter of concern.
I think what you mean is, more credulous minds than yours.
At current valuations AI would have to bring in $400 per year per US resident for the AI companies to produce a decent return on investment. Which isn't happening in the foreseeable future.
"Bubble" is exactly what we're looking at. The question is when, not whether, it will pop. And how big an impact that will have on the economy overall. Personally, I'm going nowhere near stock in any company which is big into AI. But then, I've been avoiding bitcoins like the plague, too.