back to article It's IPO week and one of Wall Street's own is raising the spectre of a stock market crash

In a week that saw three tech companies float on the Nasdaq and New York Stock Exchange, Wall Street analyst Bernstein is mulling the potential of a share price crash based on similar indicators prevalent during the .com bust. Sumo Logic listed 14.8 million shares on the Nasdaq at $22, and JFrog debuted on the same exchange …

  1. Anonymous Coward
    Anonymous Coward

    There is a huge bubble

    that will go 'Pop' very soon.

    Lots of tech stocks are very overvalued and are due for a big correction.

    Tesla (TSLA) and Apple(APPL) are just two of them.

    There are others with totally insane P/E ratios. Having an IPO of a company that has never made a dollar in profit would have been impossible 20 years ago. These days, it seems to be the norm. Just look at Uber.

    If you have any investments in the market then I'd look at your portfolio and see if you can survive a 10%, 25% 50% or even a 75% crash in stock price. Then do what is necessecary to protect your investment.

    1. Anonymous Coward
      Anonymous Coward

      @AC - Re: There is a huge bubble

      To down-voters of this post : we would appreciate your thoughts and opinions. This is a serious matter and a constructive discution will surely benefit us all.

      Oh, in case you didn't spot the difference, I'm the other AC.

      1. amanfromMars 1 Silver badge

        Re: @AC - There is a huge bubble with s***talking elephants in the room

        we would appreciate your thoughts and opinions. This is a serious matter and a constructive discution will surely benefit us all. .... Anonymous Coward

        Happy to oblige, AC, and I'll keep it short and succinct.

        Here be the crazed bull in the expensive china shop destroying all common and delicate stock .... https://www.zerohedge.com/markets/peter-schiff-when-exactly-are-they-going-deal-debt

        Whom do you recognise there as being played for the ultra conservative convenient fool and useful ignorant patsy and what does the program further blight and destroy? Anyone else other than yourselves ...... and the next generation, your children?

        And the answer to those questions is ...... Quite so, no one else .... Idiots'r'us.

        Are y'all destined to be going the same way of the dinosaurs of old ...... catastrophic sudden extinction or is that being specifically and exclusively reserved for crazed bulls destroying expensive china shop stock sharing portfolios ..... present and future inventory?

        And there's only one sensible sane answer to that abiding current long overdue choice too. The quality of your future life, which surely is a very serious matter, depends wholly upon it.

        The questions left hanging there then are ...... Are you both smart enough and bold enough to do what is fundamentally necessary ? Cut out and destroy the toxic rot and its virulent delivery agents.

        Or do you need to be remotely saved with able outside help from that and/or those able to help expertly from outside of the bubble with the fundamental necessities? All of those choices be freely available to you, which is surely an extremely convenient blessing, and that is at least one helluva massive understatement indeed.

        Decisions, decisions, decisions ........ wherever would we be without them?

        1. Jonathon Green

          Re: @AC - There is a huge bubble with s***talking elephants in the room

          When our resident LGM makes more sense than tech company market capitalisations then you just know there’s a reckoning round the corner....

          ...but hopefully not until my employer conceives and executes an exit strategy which makes the considerable number of stock options I’ve accumulated In the years since we were four people in a serviced office worth more than the paper they aren’t printed on. :-)

          1. amanfromMars 1 Silver badge

            Re: @AC - There is a huge bubble with s***talking elephants in the room

            My advice, Jonathon Green, is get out of anything dodgy right now, for the opportunity to make money on phantom stocks and unicorn shares is not future present available.

            And with further regard to those aforementioned RATs, London is crawling and plagued by them as everyone knows, except it seems those whose job it is catch and eliminate them ...... FinCEN Files: HSBC moved Ponzi scheme millions despite warning

            And all banks are willing members of that rotten exclusive club, and about which you were warned again not so long ago [15days] if you recall. .......A BIG Club & You Ain’t In It! ....... https://forums.theregister.com/forum/all/2020/09/04/linux_kernel_flaw_detection/#c_4102986 ...... and your governments permit it because they profit extraordinarily from it.

            Surely no one sane or not wilfully ignorant can deny that simple fact?

            1. Anonymous Coward
              Anonymous Coward

              Re: @AC - There is a huge bubble... ...in the room

              the analytic excellence like this is what is desperately needed by them, but... there are numbers of stages of this said excellence, which, in its perfect extent - oh, hope it's much more than just wet dreams of pubertines (-: and it's neither sold, nor bought,..

              ...and never has it been placed as a lot for sale.

              hasn't it?

              no capit(a/o)ls

      2. big_D Silver badge
        Joke

        Re: @AC - There is a huge bubble

        You dared to put a blight on Electric Jesus' Tesla. That is not allowed!

    2. Anonymous Coward
      Anonymous Coward

      Re: There is a huge bubble

      3rd AC here. Not the downvoter, but if you look back 20 years, valuations were insane then as well. Any company that was a ".com" had stock snapped up by retail investors. Business model? Who cares, it's an Internet thing, traditional metrics don't matter (narrator's voice: "but they did").

      Companies like Cisco were overpriced, but at least they made something that could be sold.

      Tech bubble aside, there's a lot of boomers that will be pulling money out of the stock market in coming years, wondering how much of an effect that will have. A large outflow during a downturn could be a wild ride.

    3. Daniel von Asmuth
      Pint

      Re: There is a huge bubble

      I suppose that the difference with 2000 is that in 2020 companies are too big to fail and are eligible for state support to cover any losses.

  2. Anonymous Coward
    Anonymous Coward

    Don't listen to him. I sold all my tesla stock at $1000 cos I thought it couldn't possibly go higher. Then it went up to $2000, split 5 ways then went up even more. The market is stupid.

    1. Anonymous Coward
      Anonymous Coward

      Tesla Valuation

      For a company that has only just started to turn a profit their valuatiion is insane.

      There is no way that on their earnings to date, their balance sheet and the ongoing trade war with China that they are the most valuable car maker in the world.

      I'm not saying that in future they won't be but in the here and now? really?

      This highlights an age old problem with Wall St. As long as profits are rolling in the gamblers win. But there comes a time when the forcasts made by analyists are simplty pie in the sky.

      There was a case back in the 1970's where a US Insurance company kept on producing record profits quarter after quarter after quarter. Pretty soon, the alalyists were predicting that their customer base was going to be greater than the entire population of North America (inc Canada and Mexico). It was there for all to see but people were blinded by the light of prospective profits. Then the house of cards came tumbling down and many people were ruined.

      I think that the OP was saying that it is a good time to look at the real long term viability of your investments and how would those companies fare with a market crash similar to 1929. If you are over exposed to any one sector then it is time to do something about it. Putting money into companies that are in Elon's own words 'like a hundred startups' (aka Tesla) might not be the best place to put all your money. Having some under the mattress might be a good idea.

    2. Steve Davies 3 Silver badge

      perhaps...

      You would have done better to sell enough stock to cover yourt initial investment and then let the rest ride? Then you could protect your investment and also share in the shock price rise knowing that you won't be out on the streets if TSLA went TITSUP due to a market crash.

      As you say, the market is stupid. Only the foolhardy don't spread their risk.

    3. teknopaul Silver badge

      out at 1000

      Don't beat yourself up. It's better to get out when things are getting silly, it's easier to spot that, than when the sillyness is going to crash. It's also easier to asses when a crash has gone to far.

  3. Kevin McMurtrie Silver badge
    Trollface

    If it's 1999

    Uber and Snowflake can enter a joint-marketing deal that generates billions of dollars for each other in ad views and guarantees eternal exponential growth.

  4. Tom Paine Silver badge

    Tool and trouble

    US equities have been insanely overvalued for years. It's little consolation that various people who've ignored my warnings of imminent soon since 2014 have made small fortunes doing so....

    1. Lee D Silver badge

      Re: Tool and trouble

      Stock markets are based on "who's holding the hot potato".

      People think they have anything to do with reality, and they don't need to have. You invest in something, it goes up in value (and the reason literally does not matter), you sell JUST BEFORE it crashes. You make an absolute fortune and yet may have had no idea whatsoever what Company X even sold, let alone did any kind of market analysis.

      It's not about "owning stock", it's about making money. And you can make money by just riding the knife edge and having an intuition about when best to sell, or even waiting for the crash to START and then to start selling. You'll still make money if it was something like Tesla, for example, but you'll sell on the sudden 10% down-dip, rather than wait for it to hit zero.

      It does not need to have anything to do with the stock, the product, what others are buying, the market state, global economy or anything else. It's just a graph to some people, and they buy when the graph is low, sell when the gradient changes against them rapidly.

      Those kinds of traders literally don't care if Tesla goes bankrupt the day after. Unlike, say, people investing for pension funds, etc. They're just riding the rollercoaster of the graph, making a fortune, and spreading the risk. They probably just have automated sells in the system (which further contributes towards crashes, as has been proved in previous such panic-crashs).

      So long as you're not left holding the hot potato, you'll profit.

  5. Danny 2 Silver badge

    Light relief for our non-British pals

    Woman falls from car on M25 filming Snapchat video

    "It is only by luck she wasn't seriously injured or killed. #nowords"

    I'm just disappointed it wasn't a TikTok video, missed zeitgeist opportunity. I'd offer my opinion on a financial crash (I'm for it) but I've not had a bank account since 2008 so I'm best ignored.

  6. Version 1.0 Silver badge
    Pint

    Either the US market will collapse or the US will collapse

    The stocks are sailing back up again and we have an election in a few weeks. There are two possible winners, if Biden wins then I would expect that the markets will drop because the Democrats will be working on fixing the US mess and the Republicans will be fighting a Democrat presidential win as being undemocratic, but if Biden loses then the markets will rise again while the stock buyers all rush into the toilets to celebrate with a quickie. I suspect that a long term collapse will be on the horizon because the US is deeply in debt and keeps on spending money while attacking all its international customers. The future is uncertain - if the Republicans keep jerking off over the death of Ruth Bader Ginsburg then regardless of who wins, it will be a mess and the markets will dive eventually.

    I would vote for Brendan Behan, "The most important things to do in the world are to get something to eat, something to drink, and somebody to love you." ... the markets are irrelevant (icon).

  7. osakajin Bronze badge

    Rdsb is below a tenner. Look for traditional distressed assets now. But I think there is a lot worse to come once the real fustercluck hits in 6 to 12 months time due to mortgage defaults and persistent unemployment.

    This is just the start of another decade of decline.

  8. Aristotles slow and dimwitted horse Silver badge

    Hedging.

    I can make money both long and short, so if markets, indexes and shares do come down... I'm none too concerned.

    1. amanfromMars 1 Silver badge

      Hedging an abounding consternation concerning almighty corrections/realistic future expectations

      I can make money both long and short, so if markets, indexes and shares do come down... I'm none too concerned. ..... Aristotles slow and dimwitted horse

      How does one hedge in order to be none too concerned, Aristotles slow and dimwitted horse, about certain systems [in Advanced IntelAIgent Development] going long and speculating shorting current hyper valuing marketplace spaces/pump and dump boilerplate operations being able to survive and prosper from overpriced toxic quixotic market darling meltdowns?

      Would the algorithm say .... Pile into and support both in order to make funny money on the collapse of a not so very vital and virile marketplace mover and shaker after all?

      How do you stop that which is surely akin to a sublime premium, sub-prime marketplace space cannibalism ?

      1. Tail Up

        Re: Hedging... ...realistic future expectations

        Rozenbaum. Au.

        INIT SEQ:

        "

        https://youtu.be/35XNKoNexhI

        "

        ADD VAL, 1

        CYCL: USR_DEF 《》

        :END OP

        UP, vote?

  9. Cuddles Silver badge

    Tech

    "market consensus has crowned tech as the clear secular winner"

    Not really. Market consensus has simply applied the word "tech" to a big pile of entirely unrelated businesses with no regard for what any of them actually do or what the work might actually mean. Just have a quick think about what some of the best known "tech" companies actually do. Apple - computer producer and software services. Tesla - car manufacturer. Google & Facebook - advertising brokers. Amazon - retail shopping, computing services. Uber - unlicensed taxi company. Airbnb - unlicensed hotels. Wework - real estate rental. Snowflake - I'm not even sure, as far as I can tell they just resell AWS, Azure and Google and don't actually do anything themselves at all.

    "Tech" can't be a winner because it simply doesn't mean anything. It's applied to a random mix of traditional manufacturers and retailers, traditional manufacturers and retailers that happen to have an app, a big pile of mostly rather questionable startups that may or may not have anything related to some kind of technology if they ever figure out what they're actually doing, and a few companies that actually do things related to information technology.

  10. James Fox

    "Seven of the nine big tech businesses at that time – including Cisco, Intel, Oracle, Hewlett Packard, Nortel, Lucent, Sun Microsystems, and Hewlett Packard"

    Hewlett Packard, so good they valued it twice.

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