Thoughts On Valuations, The Coming Tech Unemployment Crisis, And SKTLs Space Crypto
My family needs me to run up to Albuquerque so we won’t be able to do this week’s Live Q&A Chat until this coming Monday, June 6 at 10am ET. Come to the chat room or hit reply if you have a question about stocks, markets, economy, trading, politics or even music, sports or whatever.
A few notes from my computer that I’ll share before I leave later today:
1) I ran Salesforce CRM thru my P/P spreadsheet. It’s trading at 55x 5 years out profits. I also ran the TradeDesk TTD through and it’s trading at 61x 5 year out profits. For RBLX, their model doesn’t turn profitable at any point in the next five years unless they grow at least 30-40% topline….annually… for 5 years straight. There’s stuff trading at 8x-12x 5 years out profit (INTC, PYPL, ROKU, QCOM, FB, GOOG) but there’s out stuff that’s just still wildly overvalued. I do think some great stocks are probably putting in some bottoms here, but there’s probably still a lot of fluff to come out of many of those still highflying growth-y names unless they can truly put their growth into a higher gear in the next year or two.
2) Silicon Valley’s got an overemployment problem that is quickly fixing itself and is probably going to over correct to the point where it becomes an unemployment problem before fixing itself again and finally reverting to a mean. Unemployment in telecom went from 1% to 30% when the dot com bubble crashed from 2000 to 2002 (when the market bottomed) before getting back to normal in 2004 or so. Unemployment in the dot com/software/hardware/tech sector in general went from 2% to 15% from 2000 to 2002. Salaries are going to come down for programmers, engineers, project managers and so on. Wages are probably going to continue to climb for restaurant/retail/blue collar jobs because living wages for the lowest paid people are probably double what they were ten years ago. All those millions of job openings that don’t pay living wages in this inflationary world with a housing/rental bubble are going to remain mostly unfilled until wages and benefits go up. One $450,000 a year engineer with $200,000 more of benefits and gourmet lunches with free massages ain’t gonna normal any more. But a $20+/hour job with some benefits serving burgers is probably going to become more normal. More on this as I analyze these trends further.
3) Here’s a video I made a couple weeks ago called Everything You Need to Know About The New SKTLs Space Cryptocurrency. I walk you through how to see if you got the airdrop, how to buy or sell SKTL tokens and I give you my take on the current Crypto Crash and when it will end.
I leave you with a shot from my drone that I took during my wife’s sister’s daughter’s wedding last weekend in Caballo, NM. You can see the smoke from the giant Black Fire forest fire in the background:
