Rendered at 03:52:36 GMT+0000 (Coordinated Universal Time) with Cloudflare Workers.
foolswisdom 5 hours ago [-]
For all the federal election related takes, remember that
1. Market price changes are changes from what was expected before compared to what is expected now. And not even only in regards to the asset itself, but with respect to comparative change in other assets as well.
2. conventional wisdom when the branches of government are divided, less change comes from the government, so you can expect that your expectations for the future will remain stable, and that confidence reduces risk aversion, resulting in higher pricing.
Therefore, the market going down cannot be attributed purely to a question of who is in charge, because the democrats can't pass anything unless they get a nice number of Republicans on their (possible I suppose, but I don't think anyone is expecting that right now). But it could be attributed to expectations of what Republicans would do vs now that they can't.
Besides, it's basically impossible (or at least for layman, who knows if you're a market maker?) to accurately attribute a day's market behavior to any event, with a compelling causal explanation (sometimes your attribution could also be explained to have the opposite effect than the one you're trying to explain) and not ignoring alternate possible explanations.
It's kinda annoying when even otherwise serious people invoke the market movement of a day as an meaningful event that can be explained (notwithstanding that by tomorrow the effect might have reversed). But unfortunately business news like CNBC promotes that kind of thinking.
foolswisdom 5 hours ago [-]
It's still quite possible that all the non federal items on the ballot (lots of anti data center referendums, lots of democrat politicians in state office) matter quite a bit.
neuroelectron 5 hours ago [-]
Whaaaat? No. It's an AI correction. See, AI correction. You don't see that? Why would you think the recent election is a factor?
foolswisdom 5 hours ago [-]
That's exactly why it's an AI correction! Because they've been betting on (increasing?) velocity, which was always going to come to halt sometime, but this election is abrubtlu interrupting. Changes in expectations, even if the business were to remain good, is bad in valuation.
yojo 5 hours ago [-]
State government leadership did change in unexpected ways, and they do get to pass laws. See: Texas
foolswisdom 5 hours ago [-]
Yes. I actually hadn't read the article before commenting because initially the link was to the Reddit thread. The data center buildout slowing, with Texas (among others) blocking otherwise expected to be built data centers is probably a significant justification for re-evaluating the business.
SteveNuts 5 hours ago [-]
The "planned" capacity in Texas represented over 40% of the total power generation of the entire USA, how did the market think that was going to get built even without moratoriums?
DivingForGold 2 hours ago [-]
Maybe they planned literally THOUSANDS of "walkaways" or "wheelhouses" with horses or cattle going round and round in circles powering generators, every 4 hours new, fresh horses go online and the previous go to pasture to eat more grass.
Grass / weeds to data center power conversion achieved !
mminer237 4 hours ago [-]
$2–3 trillion dollars would honestly be about the right price to do that.
Freedom2 4 hours ago [-]
Curious to see your working out for that statement, if you have it handy.
dylan604 4 hours ago [-]
> how did the market think
Wait, what? When does the market think at all?
shimman 4 hours ago [-]
If your business is this faulty that you have to rely on subverting democratic norms maybe you don't deserve to run a business in said society.
gottorf 3 hours ago [-]
> If your business is this faulty that you have to rely on subverting democratic norms
I'm not seeing the relationship between building datacenters and subverting democratic norms. Could you explain?
pixelatedindex 55 seconds ago [-]
My take is that they get subsidized energy prices and the average person is going to pick up the tab. That doesn’t seem very fair.
ferrouswheel 2 hours ago [-]
the people building datacenters don't want to go through the normal process. they want special exceptions to do whatever they like and put the externalities on other people.
dylan604 4 hours ago [-]
It's worked out quite well for social media, so why not AI?
bdhe 4 hours ago [-]
Did social media REQUIRE to subvert democratic norms or is it just that social media was so good/powerful that it ended up inadvertently hurting democratic norms and that social fabric?
I didn't think your Facebooks and Twitters required shady data center deals and circumvention to actually establish a viable business model.
serf 21 minutes ago [-]
>I didn't think your Facebooks and Twitters required shady data center
there were years of debate on whether or not a lot of the things early social media groups did constituted violations of, and not limited to : FTC Act Sect 5, the electronics communications privacy act, the CFAA, the video privacy protection act, and us state privacy laws from coast to coast.
they just did what they wanted, lawyered up, got big enough to lobby, and became legal ..
point is, these groups aren't stranger to 'shady deals'.
krapp 3 hours ago [-]
Neither. Governments and other politically aligned entities realized social media was useful and it was intentionally used to hurt democratic norms and the social fabric. It was neither an accident nor an intentional part of their business model (with Facebook being a possible exception.)
It's heresy to say here but related content algorithms aren't inherently evil.
Nvidia can be down to 3-3.5T market cap from 5-5.7T heights
rconti 5 hours ago [-]
It's interesting.
The market should have already priced in an almost-certain Democrat takeover of the House, and a 75% chance of takeover of the Senate.
And yet the markets rallied hard the day after the election. Why?
* Maybe it was responding positively to the scale of the Democrats' win, for whatever reason.
* Maybe it was the removal of uncertainty.
* Maybe it was reacting positively to the fact that there weren't massive irregularities, lawsuits, chaos, extended vote delays, etc.
But then flipping even harder negative the day after is even harder to explain purely in electoral terms. Maybe it was just time.
bentt 35 minutes ago [-]
Feels like blind optimism that the country is still capable of governing itself led to the rally, and then a whole bunch of profit taking.
My guess is this levels off after a week.
foolswisdom 5 hours ago [-]
I've wondered the same. But nevertheless that 75% probability becomes more of a certainty after the election, combined with all the smaller elections and ballot proposals that came in anti data center. Besides, there is always some uncertainty around the polls these days, and there's a bias towards not moving your money (for tax reasons if nothing else). But I'd love to hear from someone who works in the industry.
gruez 5 hours ago [-]
>and a 75% chance of takeover of the Senate.
Maybe if you were looking at the most optimistic forecasts. Most forecasts and betting markets had it at 50-50
foolswisdom 4 hours ago [-]
I think the days before the election polymarket had it at 75% no? Which I guess is also about when the AI stocks started sliding.
lovich 2 hours ago [-]
Is poly market now the gold standard over polls?
For public elections and not situations where a handful of people in the White House can make massive bets prior to an executive decision using insider trading knowledge?
gottorf 3 hours ago [-]
> And yet the markets rallied hard the day after the election. Why?
> * Maybe it was the removal of uncertainty.
Impossible to explain why the market does what it does on any given day, but almost certainly that was a mechanical response of reduced uncertainty and hedges being unwound as a result of that.
B4uler5 5 hours ago [-]
I can never tell if the market’s movement has anything to do with the actual news cycle or is that just analysts ascribing their finger in the air analysis to things they only vaguely understand.
I remember one time essentially reading from a market watch article that the market was up because it was a Tuesday and people feel real good about Tuesdays.
dylan604 4 hours ago [-]
Better than Thursday. Never got the hang of Thursday
foolswisdom 5 hours ago [-]
LOL!
sjdh76 1 hours ago [-]
Weather also can be kind of annoying. We might as well be talking to the clouds.
"Serious people" have no big reason to be in alignment. Thry can also display opporunistic, parasatic and status signalling behavior that benefts them more than others. Add population scale. Add social media noise/info overload factory. Add attention exploitation mechanisms. What do people control about it - nothing. Unless you live in China.
dist-epoch 5 hours ago [-]
Only those who never traded the stock market for real (like financial journalists) believe that you can attribute news to a market event.
"The market went down because the Fed increased the rate"
schnuri 6 hours ago [-]
I always find these market cap numbers misleading. The US stock market isn't "worth" $2.5T less. If you multiply the marginal share price by the total number of shares, you get a number that's $2.5T lower. That is something different. E.g., if you tried to sell all Nvidia shares at once, you'd never get anywhere near ~$4.5T (just as buying them all would cost far more).
smallmancontrov 5 hours ago [-]
> if you tried to sell all Nvidia shares at once
That is something different: liquidation value. Market cap tells you the sum total of the numbers next to this ticker symbol in everyone's brokerage account. It tells you the collective expectations about future returns and also the wealth effect that people feel based on their ability to individually obtain cash for shares.
It is true that neither of those things is liquidation value, but also liquidation value is neither of those things. If you expect a liquidation scenario, sure, use liquidation value. If you don't expect a liquidation scenario but want to measure collective expectations of and confidence in a stock, use market cap.
tyrabound 4 hours ago [-]
The point is still appropriate and relevant. I would have probably described it more like the same kind of con of American retailers that constantly run 80% off sales, which they come to by staking the fake sale percentage to a fake, fraudulent, made up number that the majority of the goods never sell for, i.e., MSRP.
Same clownish nonsense with this OP story, the S&P is still up 7.5% YTD, all that was lost is fabricated made up numbers on paper/screens. Now, if people sold stock and booked $2.5T in losses, then call me out please.
I can't stand the constantly lying, fraud, conning, and gaslighting. Maybe the market will drop more, maybe the counterfeit dollar market will go up. But reality is that noting is lost or made until you sell.
mminer237 4 hours ago [-]
A huge volume of stocks are traded at market price every day. I don't think that's a dishonest valuation at all.
jwpapi 4 hours ago [-]
but it’s still so wrong. Like if I fund a company and I sell 1% to my mum who really believes in me for 100.000 USD I’m suddenly worth almost 10 million and the market cap of my company is 10 million, even though nobody might even pay a penny for my company. I don’t think most people are aware that this is how it works and crypto currencies have abused this a lot, by just selling a part of their shares, creating scarcity in the market and reaching high market caps. The traditional financial market is not that much different I feel like.
If Elon Musks sells all his shares the value of SpaceX and Tesla would drop dramatically I don’t know how much realistically he would be able to liquidate from his shares.
So the headline "is wiped" is misleading. I think it’s all ultimatively to get money in the markets and support growth
adam_arthur 5 hours ago [-]
What something's worth is what somebody is willing to pay for it.
And conventionally, we use the marginal buyer's bid as the measuring stick for public companies. e.g. the share price
Of course, the intrinsic value based on currently known data/fundamentals is unchanged.
But many market valuations are disconnected from that to begin with. Loans, options, warrants, many things are tied to the market cap/share price of a company. E.g. what is the LTV ratio when lending? What are my RSUs worth?
smallmancontrov 5 hours ago [-]
> What something's worth is what somebody is willing to pay for it.
This is completely and definitionally true in the context of trading, but keep this definition on a leash because if you apply it outside a purely financial context it tends to smuggle wealth-weighted objectives into your thinking, and regardless of whether or not you think that's moral you probably want to be aware of it. Example: feeding orphans is zero "value" because they can't pay you but merging the banks into a mega-bank to raise fees and collect bailouts has extreme "value" because it can make a bunch of obscenely rich shareholders even more obscenely rich and they can carve you off a mighty slice.
Due to this mismatch I keep both definitions in my pocket: Wealth Weighted Value for finance, People Weighted Value for more colloquial settings or moral analysis. "Exchange Value" is a good quasi-synonym for WWV if you want something less confrontational.
wat10000 5 hours ago [-]
The point is that market cap doesn’t tell you what people are willing to pay for a company. When a stock price is $100, that means people are willing to pay $100 for one share. And then because big companies have a big market for their stocks, this can be extrapolated out to a few thousand or millions of shares without much loss of accuracy. But it falls apart when you go beyond a small fraction of outstanding shares. A $100 price may mean people are willing to pay $100 million for a million shares. But it probably doesn’t mean people are willing to pay $1 trillion for ten billion shares. At some point the marginal willingness to pay will shift.
This becomes visible in buyouts where the cost of acquiring a company is significantly higher than the share price multiplied by number of outstanding shares.
jwpapi 4 hours ago [-]
its literally the upper bound.
wat10000 3 hours ago [-]
You mean lower bound? The market cap is the minimum you could pay to acquire that company at that moment, but you’d almost certainly have to pay more.
danielmarkbruce 58 minutes ago [-]
Tell that to someone doing a buyout...
How does one talk so confidently about something they know nothing about?
danielmarkbruce 5 hours ago [-]
People in finance have largely (and correctly) agreed that the marginal buyer and seller represent the best guess for the value of the business with very few exceptions. There are various flaws with this, but you won't come up with a better method, I can guarantee it.
jwpapi 4 hours ago [-]
People in finance all profit from the same scheme.
I can come up with one right now. Instead of calculating it from the last price calculate it from some deepness in the order books. Realistically you cant drop just shares without moving the market so no company can just get 10% of shares dropped without losing a lot more in price impact. We only look at a small part of the market and the last price is practically the highest somebody on the world would pay for one more share. Nobody is buying for more. So its a upper bound not a good estimation.
danielmarkbruce 1 hours ago [-]
This is a stupid suggestion. Go deep in the order book in which direction? There are both sell and buy orders. Last trade was both the highest someone would bid and the lowest someone would offer, by definition. Every trade is that.
Leave finance to people who have a clue.
carlosjobim 2 hours ago [-]
The last price is also the lowest value that anybody in the world would sell one share for. Incredible that people never get this when it's the most basic thing: Every trade has somebody buying and somebody selling.
aeternum 4 hours ago [-]
So how do you measure the market cap of a company in a less misleading way?
ghshephard 5 hours ago [-]
On the flip side - if you wanted to buy all of NVIDIA shares - you would have to pay more than $4.5T - likely 20-25% premium. So this cuts both ways.
The peer-comments about the market cap being representative of the expected value, or present-value of cash-flows with some discount / risk adjustment are on point. (which implies that the change in market cap might be a change in cash-flows, change in discount (typically FedRate) or risk)
5 hours ago [-]
notSupplied 4 hours ago [-]
That same flaw applies to the category of "billionaires".
You can't just take the marginal share price and multiply by the total number of shares to magically get a number that is conceptually equivalent to your normie's brokerage or 401K account: A normie can liquidate their portfolios tomorrow at the market price, but no billionaire can.
jwpapi 4 hours ago [-]
!!
hacker_9 5 hours ago [-]
I agree, its such a pet peeve of mine these sensationalist headlines. The price gets bid up, majority of shares were mostly bought at cheaper prices, but when there's a drop it's still 'new price x existing quantity' which means we lost X trillions.. Yet it never existed in the first place!
curiousllama 5 hours ago [-]
2.5T sounds impressive, but less impressive next to 82T total market cap
refurb 2 hours ago [-]
But your argument can be applied to anything.
Say my car is worth $15,000. But you could say “if you tried to sell it in the next 4 hours you’d never get that much”. And that’s true.
But nobody prices cars based on what you could sell them for in the next 4 hours because the market doesn’t normally transact like that.
Just like no one prices stocks based on how you’d get if you sold the entire market cap at once because the market doesn’t normally transact like that.
stinkbeetle 5 hours ago [-]
That's basically the same as anything that could be bought and sold though. Your house is worth what you could sell it for tomorrow, not an impossibly unlikely tomorrow in which all house owners decided to also sell. I don't even know how or why you would try to value according to some crazy scenario like that, but it would be much more misleading IMO.
Everything is valued in prevailing conditions. Conditions change, and value changes.
curiousllama 5 hours ago [-]
This is definitely scary, but not the end of the world (yet).
The S&P500 is still up ~7% YTD, and 5y CAGR of 9.4% before dividends, in line with historical norms.
This is primarily a decline in tech: week over week, the S&P is -4.5% (SPX), but the S&P excluding tech is +0.1% (SPXT).
Right now, this looks like speculation that tech will reduce capex after Q4 earnings (Nvidia, Micron, Sandisk, AMD all down >2x vs the S&P). But it'll take time to tell; most just announced Q3 a week ago.
All this to say: expect volatility, but no need to panic.*
*(Unless you're in TQQQ. Then panic.)
Gathering6678 1 hours ago [-]
A side note: TQQQ follows 3x intraday return if I remember correctly, but if you buy-and-hold TQQQ (or any other similar products), you will be hit by a lot of friction cost, and the return will be worse than 3x.
masfuerte 5 hours ago [-]
In case anyone else was wondering:
TQQQ is the only ETF (Exchange-traded Fund) that targets 3x the daily returns of the Nasdaq-100 Index.
Ouch!
staticman2 5 hours ago [-]
It's not scary at all unless you think stocks are a riskless asset expected to always go up and bonds and bank accounts are for suckers.
lachlanj 5 hours ago [-]
Google got punished in the last few days for too much Capex. So what does the market want, less capex or more capex?
outside1234 5 hours ago [-]
Less Capex, More Profit
MikeNotThePope 2 hours ago [-]
[dead]
MSM 5 hours ago [-]
There's a lot of conjecture about how the midterms have caused the drop today but I can't help but think it may just be a convenient coincidence. Yesterday was one of the largest bumps of the year and by yesterday it was already known that Democrats were taking control.
Is this just the start of the fall that many people have been predicting for months? Did something materially change in the Democrats' stances or policies since yesterday? Or is something else unwinding entirely?
CoolestBeans 5 hours ago [-]
In fact the Wednesday bump could have precipitated today's correction as traders looking for a nice sale price window found one.
I would put this as part of the larger crunch in the AI trade that started just before earnings season as people digest what margin compression in traditional revenues for the big tech companies means going forward. Just with bigger swings because of the election.
dylan604 4 hours ago [-]
> In fact the Wednesday bump could have precipitated today's correction as traders looking for a nice sale price window found one.
How do you manipulate the market like that and not get caught?
AndrewDucker 4 hours ago [-]
That's not market manipulation. That's thinking "There's going to be a crash in the next couple of months, if it goes up to $x then I'll take the profits and cash out"
It's interesting reading the panic then in the comments, and yet now the nasdaq is up 65% from those lows, even with today's drop.
runarberg 5 hours ago [-]
The context is different. We learned about the circular financing deals in Oct 2025: https://news.ycombinator.com/item?id=45473033 and since then most people have been speculating a bubble which has inflated a lot in the year since.
The AI bubble is the background context, but on top of that there is the immediate context Anthropic S1 where we learned what journalists had been speculating for a while that the AI industry is in fact not nearly as large to justify the valuations of AI companies. And finally we have the election where local governments in the USA were elected on the grounds to stop the AI datacenter buildout.
Now with that context in mind the current dip does not look like some random and normal fluctuations in the market.
What is also different, for me at least, is that many of us (including my self) are rooting for the AI bubble to burst. And seeing these signs makes us existed that it is finally (maybe) starting to happen.
pixel_popping 51 minutes ago [-]
Circular deals have always been part of the top companies operations and is absolutely known from a financial perspective since forever, nothing new.
I believe that will continue regardless of regulations, as long as Co Y and Co X is allowed to buy from Co N, then that can't be fixed.
jrflo 5 hours ago [-]
Sounds scary until you realize that this happens about once per year on average. If this happens again tomorrow and a few more times in the few couple weeks that would be bad, but as of now it's notable but not a huge deal.
zer00eyz 5 hours ago [-]
Not really - today was a rare and large sell off - last time that was close was 2020 - for the pandemic.
The question one should ask is how far down does it go and if history is any indicator it's not gonna be up from here before the new year (and likely down a bunch more). There is a LOT of over valued stocks still to be cleared out - I suspect the cut is gonna be a lot deeper. The history on this is 2018 for Trumps last midterm and a pending rate hike. Sticky oil prices are gonna drive inflation and the fed raise's the market suffers.
bwfan123 1 hours ago [-]
> There is a LOT of over valued stocks still to be cleared out
Gigantic amount of debt is contingent on datacenter buildouts and roi on it. All of that suddenly got repriced. This is a catalyst for a multi-year grind-down of the ai-trade. See 2000-2002 for a parallel.
Tadpole9181 4 hours ago [-]
What do you mean? The NASDAQ dropped the same percentage 4 months ago, close to peak value? And again 6 months ago, below it's current value.
silverFork 5 hours ago [-]
Everybody knew it was coming soon.. Some were waiting for anthropic to IPO first. Markets could not wait because of public sentiment.
bloggie 5 hours ago [-]
If this is related to the election why is it happening today? Weren’t the results called on Tuesday night?
schmookeeg 3 hours ago [-]
I suppose most people are thinking of that old joke:
"Why are divorces so expensive? Because they're worth it"
As someone not terribly political, all I have is "ouch, my bank balance!" :) but this too shall pass.
u1hcw9nx 5 hours ago [-]
Last time this big wipe happened was just 19 months ago.
BatchJob 1 hours ago [-]
And its only the beginning....
zmmmmm 5 hours ago [-]
it never really existed
pjdemers 5 hours ago [-]
Inflation. When inflation is high, people want change. The democrats won because voters rejected inflation. (Which is the same reason Trump won in 2024, BTW, inflation was high, so voters wanted change). Anyway, if the democrats want to keep power in 2028, they have to deal with inflation, and deal with it hard and fast. That means (much) higher interest rates, lower government spending, and, possibly, tax increases. All of these make stocks go down.
alex43578 5 hours ago [-]
There is no chance we will see lower government spending. Neither party is anywhere close in policy to what needs to be done to correct our spending problem.
It will be a long time required here, investigating all corruption that has been happening.
Inflation increase should be viewed as a mafia in charge of a country.
donohoe 5 hours ago [-]
Relax. This happens 2-3'ish times a year. Remember last April when Trump announced tariffs.
6 hours ago [-]
amelius 6 hours ago [-]
Can I have my DRAM now?
silverFork 5 hours ago [-]
LOL
Ritewut 5 hours ago [-]
According to Sam Altman, giving you RAM would be a waste and it's better kept with him.
dylan604 4 hours ago [-]
Giving me RAM is a waste as all I'm doing is watching cat videos, but I'll be damned if sama can have my RAM.
dude250711 5 hours ago [-]
Of course! As a paid service that is.
Ritewut 5 hours ago [-]
Josh Johnson has a joke about how little this matters for the average person. How trillions can be lost overnight and your everyday Joe sees no changes.
png732 3 hours ago [-]
It is entertaining when engineers discuss finance (not that I am saying I am any better...)
aidenn0 5 hours ago [-]
Love how headlines use absolute numbers when the percentage is small.
throwaway384034 6 hours ago [-]
Looks like the party is over, now for the hangover.
huqedato 5 hours ago [-]
Sell the dip! I'm buying cheap.
dude250711 5 hours ago [-]
What next? Bubble prophets start actually short-selling?
overfeed 3 hours ago [-]
Unironically, yes. Look at the PUT trade volumes.
runarberg 4 hours ago [-]
Probably not. Most bubble prophets are tech journalists and are therefor unlikely to participate in the market (they make enough money reporting on it).
Additionally I suspect a lot of day traders are them selves AI boosters and are unlikely to believe the AI bubble is real.
rationalist 2 hours ago [-]
I bought my 2028 puts last week. They're already up 60%. This bubble pop can take it's time for all I care.
dudefeliciano 5 hours ago [-]
Interesting how the coverage of midterm elections was flagged with many users talking about how politics are not a hacker worthy topic but this somehow seems to be
outside1234 5 hours ago [-]
Don't worry, tomorrow will be worse
CodeCompost 5 hours ago [-]
Yeah, yeah, that’s cool and all, but all I want to know is whether I can get a video card at normal prices.
vladmk 5 hours ago [-]
2.5 Trillion unfortunately is nothing compared to the debt we're in smh
carlosjobim 2 hours ago [-]
Everybody who has been really angry with Elon Musk because he is a multi billionaire and that means he stole their money, are they now overjoyed with gratefulness for getting billions and billions of their stolen money back today?
i_love_retros 5 hours ago [-]
America desperately needs January to come around fast. We need some level headed sensible people running the country. We need to elect more socialists to knock these tech companies down hard. Power to the people and fuck all this AI shit.
SwellJoe 6 hours ago [-]
As usual, I was right about the market but way too early. I sold all of my AI-exposed stocks last year, as I knew the investment going into it couldn't be recouped in a reasonable time. If I'd held longer, I'd be up about 2x on those shares even if I'd only sold in a panic yesterday.
But, it also means I can probably reinvest in some of those stocks now that a correction is in progress. There are some excellent tech companies with strong leadership and strong growth (e.g. ARM) that have been too expensive for a long time; still too expensive, but getting closer to reasonable.
cgeier 5 hours ago [-]
Being early means you were not right, it‘s all about the timing.
SwellJoe 5 hours ago [-]
It's about timing and direction. Timing doesn't matter if it's not a well-run business.
Most of my holdings with AI exposure were and are well-run businesses; they were when I bought them, when I sold them, and throughout the AI-inspired rise. The problem was I didn't believe there was sufficient market opportunity to justify the stratospheric rise, and I think the market has now begun to catch up to that thinking. The market has begun to agree with the premise I based my decision to sell on.
I suspect the decline will continue and I will be able to buy back into at least some of the stocks I sold at a price better than what I sold them for.
So, yes, my post was to say I am frequently wrong on timing, even if the premise I based a decision on turns out to be true. I don't understand people, but I understand tech.
curiousllama 5 hours ago [-]
I know they'd be down 50%! I just didn't know they'd be up 500% before that.
gopher2000 5 hours ago [-]
"I thought they'd be down 50% and they're up 450% so I was mostly right"
hagbard_c 5 hours ago [-]
Yes, well, remember the dot-com boom/bust cycle? Lots of people lost a lot of money then but not all of those stocks ended up becoming worthless. Some held on to what they had and made a fortune once the internet-hype was over and the internet-era began. The same could happen with some - but certainly not all - of these 'AI-exposed' stocks. Once the 'AI' hype is over the 'AI era' will probably begin, especially if the dearth of RAM and matrix processing capacity is solved somehow.
SwellJoe 5 hours ago [-]
That was the first time I was right but early. I sold out well before the peak to start a business with the money. I made money, roughly tripling my investment, but lots of folks made more money (and lots of folks lost a lot of money). In this case, I sold at a profit, but I could have made a bigger profit by being more slow to respond to my understanding of the market.
png732 4 hours ago [-]
With all respect, you were not right. Your stocks are still above where they were when you sold them. To say that the stocks you held would at some point experience a large one day drop is a certainty.
SwellJoe 4 hours ago [-]
I've never said "one day drop".
png732 4 hours ago [-]
To say that the market would have a correction at some point in the future is also a certainty.
0xy 3 hours ago [-]
So you sold low and are now buying in high? Seems like you just massively misjudged the market.
tjwebbnorfolk 5 hours ago [-]
Tell me the difference between early and wrong
SwellJoe 4 hours ago [-]
I mean, I made money on all of them. 3x on ARM. And, there are folks who lost a bunch of money by being long today in all of those stocks.
But, also, right but early isn't worth much. I've sold too soon many times...most often making money, but selling early in the rise.
5 hours ago [-]
hn_submit 6 hours ago [-]
People the AIpocalypse is real!! Brace yourselves for a $10 Trillion wipeout.
Anthropic and OpenAI will disintegrate and vanish in the mist.
That's all folks!!!
yread 6 hours ago [-]
I'm already pushing my bathtub out so that I can catch all the GPUs that will soon start raining down from the clouds
drivebyhooting 6 hours ago [-]
I hope not. I need my subsidized subscription and I’m not satisfied with argon
novaRom 6 hours ago [-]
Selling AI stocks before year-end makes sense, right? New Congress, new House take over in January. Cost of living so tax hikes next year. Better to lock in gains now than pay more later? Besides cash is now bringing more than 4% pa
hoppp 6 hours ago [-]
End year sales are common. Black friday, Christmas whatever. People spend and taking profit feels good.
aaron695 6 hours ago [-]
[dead]
triceratops 5 hours ago [-]
> Cost of living so tax hikes next year. Better to lock in gains now than pay more later?
Deliberately pay capital gains tax now on the off-chance taxes go up next year? You do you my friend.
ThunderSizzle 5 hours ago [-]
I expect Democrats to be as pro big business as they always have been - as long as they are "regulated" to be in sync with Democrats desires.
They'll be anti data centers until they are no longer the opposition party. Then suddenly both Republicans and Democrats will change while MAGA/America First and woke 2.0/socialists sides won't have changed at all.
Isn't the political party system great!
cpursley 5 hours ago [-]
Datacenters of Democracy, aka USAIDS 2.0.
bell-cot 6 hours ago [-]
Similar to the old saw about you owning the bank $10 thousand vs. $10 billion, the "value" of stocks does not scale.
deadbabe 5 hours ago [-]
[flagged]
posix_compliant 5 hours ago [-]
What an inane comment. AI came out of 1950s university labs, not a political party, and tech workers still donate overwhelmingly to Democrats. Republicans and Democrats worry about AI at nearly identical rates. Copyright, energy and jobs are real issues, but a boycott fixes none of them. And "give back all tech gains" means nothing.
1. Market price changes are changes from what was expected before compared to what is expected now. And not even only in regards to the asset itself, but with respect to comparative change in other assets as well. 2. conventional wisdom when the branches of government are divided, less change comes from the government, so you can expect that your expectations for the future will remain stable, and that confidence reduces risk aversion, resulting in higher pricing.
Therefore, the market going down cannot be attributed purely to a question of who is in charge, because the democrats can't pass anything unless they get a nice number of Republicans on their (possible I suppose, but I don't think anyone is expecting that right now). But it could be attributed to expectations of what Republicans would do vs now that they can't.
Besides, it's basically impossible (or at least for layman, who knows if you're a market maker?) to accurately attribute a day's market behavior to any event, with a compelling causal explanation (sometimes your attribution could also be explained to have the opposite effect than the one you're trying to explain) and not ignoring alternate possible explanations.
It's kinda annoying when even otherwise serious people invoke the market movement of a day as an meaningful event that can be explained (notwithstanding that by tomorrow the effect might have reversed). But unfortunately business news like CNBC promotes that kind of thinking.
Grass / weeds to data center power conversion achieved !
Wait, what? When does the market think at all?
I'm not seeing the relationship between building datacenters and subverting democratic norms. Could you explain?
I didn't think your Facebooks and Twitters required shady data center deals and circumvention to actually establish a viable business model.
there were years of debate on whether or not a lot of the things early social media groups did constituted violations of, and not limited to : FTC Act Sect 5, the electronics communications privacy act, the CFAA, the video privacy protection act, and us state privacy laws from coast to coast.
they just did what they wanted, lawyered up, got big enough to lobby, and became legal ..
point is, these groups aren't stranger to 'shady deals'.
It's heresy to say here but related content algorithms aren't inherently evil.
Nvidia can be down to 3-3.5T market cap from 5-5.7T heights
The market should have already priced in an almost-certain Democrat takeover of the House, and a 75% chance of takeover of the Senate.
And yet the markets rallied hard the day after the election. Why?
* Maybe it was responding positively to the scale of the Democrats' win, for whatever reason.
* Maybe it was the removal of uncertainty.
* Maybe it was reacting positively to the fact that there weren't massive irregularities, lawsuits, chaos, extended vote delays, etc.
But then flipping even harder negative the day after is even harder to explain purely in electoral terms. Maybe it was just time.
My guess is this levels off after a week.
Maybe if you were looking at the most optimistic forecasts. Most forecasts and betting markets had it at 50-50
For public elections and not situations where a handful of people in the White House can make massive bets prior to an executive decision using insider trading knowledge?
> * Maybe it was the removal of uncertainty.
Impossible to explain why the market does what it does on any given day, but almost certainly that was a mechanical response of reduced uncertainty and hedges being unwound as a result of that.
I remember one time essentially reading from a market watch article that the market was up because it was a Tuesday and people feel real good about Tuesdays.
"The market went down because the Fed increased the rate"
That is something different: liquidation value. Market cap tells you the sum total of the numbers next to this ticker symbol in everyone's brokerage account. It tells you the collective expectations about future returns and also the wealth effect that people feel based on their ability to individually obtain cash for shares.
It is true that neither of those things is liquidation value, but also liquidation value is neither of those things. If you expect a liquidation scenario, sure, use liquidation value. If you don't expect a liquidation scenario but want to measure collective expectations of and confidence in a stock, use market cap.
Same clownish nonsense with this OP story, the S&P is still up 7.5% YTD, all that was lost is fabricated made up numbers on paper/screens. Now, if people sold stock and booked $2.5T in losses, then call me out please.
I can't stand the constantly lying, fraud, conning, and gaslighting. Maybe the market will drop more, maybe the counterfeit dollar market will go up. But reality is that noting is lost or made until you sell.
If Elon Musks sells all his shares the value of SpaceX and Tesla would drop dramatically I don’t know how much realistically he would be able to liquidate from his shares.
So the headline "is wiped" is misleading. I think it’s all ultimatively to get money in the markets and support growth
And conventionally, we use the marginal buyer's bid as the measuring stick for public companies. e.g. the share price
Of course, the intrinsic value based on currently known data/fundamentals is unchanged.
But many market valuations are disconnected from that to begin with. Loans, options, warrants, many things are tied to the market cap/share price of a company. E.g. what is the LTV ratio when lending? What are my RSUs worth?
This is completely and definitionally true in the context of trading, but keep this definition on a leash because if you apply it outside a purely financial context it tends to smuggle wealth-weighted objectives into your thinking, and regardless of whether or not you think that's moral you probably want to be aware of it. Example: feeding orphans is zero "value" because they can't pay you but merging the banks into a mega-bank to raise fees and collect bailouts has extreme "value" because it can make a bunch of obscenely rich shareholders even more obscenely rich and they can carve you off a mighty slice.
Due to this mismatch I keep both definitions in my pocket: Wealth Weighted Value for finance, People Weighted Value for more colloquial settings or moral analysis. "Exchange Value" is a good quasi-synonym for WWV if you want something less confrontational.
This becomes visible in buyouts where the cost of acquiring a company is significantly higher than the share price multiplied by number of outstanding shares.
How does one talk so confidently about something they know nothing about?
I can come up with one right now. Instead of calculating it from the last price calculate it from some deepness in the order books. Realistically you cant drop just shares without moving the market so no company can just get 10% of shares dropped without losing a lot more in price impact. We only look at a small part of the market and the last price is practically the highest somebody on the world would pay for one more share. Nobody is buying for more. So its a upper bound not a good estimation.
Leave finance to people who have a clue.
The peer-comments about the market cap being representative of the expected value, or present-value of cash-flows with some discount / risk adjustment are on point. (which implies that the change in market cap might be a change in cash-flows, change in discount (typically FedRate) or risk)
You can't just take the marginal share price and multiply by the total number of shares to magically get a number that is conceptually equivalent to your normie's brokerage or 401K account: A normie can liquidate their portfolios tomorrow at the market price, but no billionaire can.
Say my car is worth $15,000. But you could say “if you tried to sell it in the next 4 hours you’d never get that much”. And that’s true.
But nobody prices cars based on what you could sell them for in the next 4 hours because the market doesn’t normally transact like that.
Just like no one prices stocks based on how you’d get if you sold the entire market cap at once because the market doesn’t normally transact like that.
Everything is valued in prevailing conditions. Conditions change, and value changes.
The S&P500 is still up ~7% YTD, and 5y CAGR of 9.4% before dividends, in line with historical norms.
This is primarily a decline in tech: week over week, the S&P is -4.5% (SPX), but the S&P excluding tech is +0.1% (SPXT).
Right now, this looks like speculation that tech will reduce capex after Q4 earnings (Nvidia, Micron, Sandisk, AMD all down >2x vs the S&P). But it'll take time to tell; most just announced Q3 a week ago.
All this to say: expect volatility, but no need to panic.*
*(Unless you're in TQQQ. Then panic.)
TQQQ is the only ETF (Exchange-traded Fund) that targets 3x the daily returns of the Nasdaq-100 Index.
Ouch!
Is this just the start of the fall that many people have been predicting for months? Did something materially change in the Democrats' stances or policies since yesterday? Or is something else unwinding entirely?
I would put this as part of the larger crunch in the AI trade that started just before earnings season as people digest what margin compression in traditional revenues for the big tech companies means going forward. Just with bigger swings because of the election.
How do you manipulate the market like that and not get caught?
It's interesting reading the panic then in the comments, and yet now the nasdaq is up 65% from those lows, even with today's drop.
The AI bubble is the background context, but on top of that there is the immediate context Anthropic S1 where we learned what journalists had been speculating for a while that the AI industry is in fact not nearly as large to justify the valuations of AI companies. And finally we have the election where local governments in the USA were elected on the grounds to stop the AI datacenter buildout.
Now with that context in mind the current dip does not look like some random and normal fluctuations in the market.
What is also different, for me at least, is that many of us (including my self) are rooting for the AI bubble to burst. And seeing these signs makes us existed that it is finally (maybe) starting to happen.
I believe that will continue regardless of regulations, as long as Co Y and Co X is allowed to buy from Co N, then that can't be fixed.
The question one should ask is how far down does it go and if history is any indicator it's not gonna be up from here before the new year (and likely down a bunch more). There is a LOT of over valued stocks still to be cleared out - I suspect the cut is gonna be a lot deeper. The history on this is 2018 for Trumps last midterm and a pending rate hike. Sticky oil prices are gonna drive inflation and the fed raise's the market suffers.
Gigantic amount of debt is contingent on datacenter buildouts and roi on it. All of that suddenly got repriced. This is a catalyst for a multi-year grind-down of the ai-trade. See 2000-2002 for a parallel.
"Why are divorces so expensive? Because they're worth it"
As someone not terribly political, all I have is "ouch, my bank balance!" :) but this too shall pass.
Nasdaq plummets 4% into correction territory
https://news.ycombinator.com/item?id=50381623
It will be a long time required here, investigating all corruption that has been happening.
Inflation increase should be viewed as a mafia in charge of a country.
Additionally I suspect a lot of day traders are them selves AI boosters and are unlikely to believe the AI bubble is real.
But, it also means I can probably reinvest in some of those stocks now that a correction is in progress. There are some excellent tech companies with strong leadership and strong growth (e.g. ARM) that have been too expensive for a long time; still too expensive, but getting closer to reasonable.
Most of my holdings with AI exposure were and are well-run businesses; they were when I bought them, when I sold them, and throughout the AI-inspired rise. The problem was I didn't believe there was sufficient market opportunity to justify the stratospheric rise, and I think the market has now begun to catch up to that thinking. The market has begun to agree with the premise I based my decision to sell on.
I suspect the decline will continue and I will be able to buy back into at least some of the stocks I sold at a price better than what I sold them for.
So, yes, my post was to say I am frequently wrong on timing, even if the premise I based a decision on turns out to be true. I don't understand people, but I understand tech.
But, also, right but early isn't worth much. I've sold too soon many times...most often making money, but selling early in the rise.
Anthropic and OpenAI will disintegrate and vanish in the mist.
That's all folks!!!
Deliberately pay capital gains tax now on the off-chance taxes go up next year? You do you my friend.
They'll be anti data centers until they are no longer the opposition party. Then suddenly both Republicans and Democrats will change while MAGA/America First and woke 2.0/socialists sides won't have changed at all.
Isn't the political party system great!