article on whether we are in a tech mania

The article starts on page 20 of this newsletter. This tech guru guy sounds really smart, and seems pretty handsome too :slight_smile:

http://alpinemacro.com/mr/July27_2018/Tech_Mania_Early_Middl…

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Thanks for sharing this. A most important concept: But investors that managed their risk and chose companies that were truly innovating did well even if they held through the bust.

Given the recent SHOP experience and consternation over net losses, the concept of expensing the “enhancement of customer experience” instead of looking at this as R&D investment / building moat is also very enlightening (for me).

Joe
Who notes the mention of disrupters MDB and PayPal’s Venmo.

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He’s so ashamed he doesn’t want anyone to know who he is.

Nice, very nice. So do we have to call you Sir Guru now, or just Guru, or can we go back to hollering,
“Wulf!”? Oh, and do we bow? Curtsy? Snort? Spit?

:slight_smile: Dan

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I liked this quote (highlighting is mine):

The cloud alone is a 20-year investment story from today, with enormous profit potential. Big banks have only started moving to the cloud and will take 10 years to complete their transition. Many companies in other industries, like manufacturing, won’t even be starting for another three or four years. Every company in the world will need to take the cloud into account, or die. So, the amount of money that’s going to be put into this technology is enormous.

Basically, the hardware, software, security and networking for old-style data centers are going to be replaced by the new equivalent for the cloud (and during this long transition, the equivalent for the hybrid cloud). Bet against any company that makes its money from the big data centers, and bet with cloud companies, hybrid cloud technologies, and all their suppliers, which will grow for 20 years.

More importantly, I would say that if you are betting on cloud technology companies, take a good look at their business model. Bet on companies that are building a real technology moat. Consider a company risky if it is spending too much money on advertising — the need for the cloud is so hot, word of mouth is enough for most of the winners. It’s not always easy at the stage to know who is going to win — think about Google and Yahoo in the early internet phase. Picks and shovels providers are a lot safer. Every company moving to the cloud will need a cloud-ready database and a cloud tools provider.

Does that highlighted sentence sound strangely like Mongo and Pivotal? :grinning:

Saul

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