It really depends how you use it. "Technical analysis" refers to techniques that are as disparate as "cooking". There is evidence of some technical stuff being quite valid--the relevance of momentum to returns, for example--but there are also plenty of people who misuse it.
My own view is that it's a window into the pricing process and adds depth to the practice of reading the market that many analysts go through. Ignoring technical analysis when looking through charts is kind of like watching TV in standard definition instead of HD. Even though it's kind of still the same thing, I enjoy it.
I just updated with a couple more grabs. I don't want to pull the full article, but I added in the FT's long time series chart of income inequality and conclusion though.
Thought this might be a useful addition to the discussion about "is the tech market in a bubble?"
If you're going to talk about how over/under/fairly valued these companies are, it seems necessary to me to ask questions about their competitive position.
The snapchat valuation seems lofty (and I wouldn't defend it) but I could see it as reasonable if an investor believes that they have a reasonable chance of continuing to cement their competitive advantage. They are stealing market share among youth from facebook, and could extend that into a relatively meaningful and durable business once they begin to advertise.
Note that Facebook has begun effectively monetizing its mobile users: it's possible. This is probably not the right space to launch into some detailed work on Snapchat, but I doubt the valuation is driven by "lol IDK" idiocy on the part of the group backing them.
Volatility is important to option valuation but the mechanics of real option valuation (what we are talking about) are materially different from black/scholes. In fact, black scholes is more descriptive of option trading than predictive of option valuation. Since there needs to be an active market for this to be relevant, I wouldn't use it for thinking about startups.
That said, these highfalutin financial concepts are definitely applicable to startups, but really the question is "what do you think the terminal value of your startup is?"
If you think you have a shot at owning a big chunk of a billion dollar company, the value of that shot is:
(Probability of success) * (Terminal value)
If the undertaking has a 1% chance of being worth 1,000,000,000 and 99% chance of being worth nothing, then the whole opportunity is worth about ten million dollars.
So, yeah. Volatility doesn't matter all that much. Also if you are doing a Startup because of a black scholes model you are probably insane.
Many businesses have characteristics of ponzi schemes without being ponzi schemes. You're right that there is a bright line distinction in some places (i.e., if there is actually a fraud), but why is it wrong to bring up that there is a resemblance in some way?
I'd probably also note that the JOBS act, while it does give additional opportunity, doesn't do much for your ability to assess an opportunity. My colleague Jim Allen gives a good overview:
The value of lean in is almost unrelated to anything except for it's author's gender. Most of this stuff has been said before. There are tons of career books, and she cites a lot of existing research.
It's valuable because it shows a career track to women in technology, which is undoubtedly a male-dominated field. It also repackages a lot of existing knowledge into a format that is accessible to ambitious young women.
It's valuable because it allows me to talk to my sister about how she perceives gender issues. She is a mechanical engineer, and without having a common language it would be difficult for me to relate my career to hers.
It's valuable because my girlfriend can pick it up and use it to develop an understanding of how she fits in the workplace. Having a reference text allows her to interface with peers and build a dialogue.
When I first started editing inside investing, I realized something about two days into the job: we commonly conceive writing as the pursuit of truth through argumentation. In many cases, that is patently wrong. Most writing serves to stoke conversation.
All of this discussion--whether it suggests males are intrinsically different or that there is more to women's pay and achievement gap in terms of social dynamics--is the point of the book.
All of this criticism is valid, but guess what--did the book get you to think about women in the workplace? Have you considered how you behave in relation to your female colleagues and employees as a result of reading this book? If so, it's done its job.
Just a quick NB here: I installed the 'churnalism" add-in that was talked about here a few days ago, and it popped up with a note that some of the text had appeared in a press release from the British Medical Journal.
In this case, it is no big deal, but what a cool use of technology to inform and extend our knowledge.
Generally in financial time series, any exponential growth is indicative that something is growing "too fast." It has a better than "pure luck" shot at being right eventually when applied to stocks, but is misapplied when used on fiat currency....There is no constancy underlying the asset.
Of course...in order to prove something was a bubble you'd have to define "bubble" which is surprisingly hard.
This is a very interesting use case, particularly in investment analysis, my area of specialty.
The problem of obscure, rarely updated blogs with fantastic information (but no reader base) is plainly evident here. I can think of a blogger who is a fixture on "who's who" lists, but publishes a blog so ill-trafficked you can hear the crickets chirping. There are hundreds of these guys.
I'm at work on a finance-specific version of this. Hopefully we can announce something before the readerpocalypse.
By nature this will work better--or at least be most available--working at companies with established headcount needs and turnover. Think of "analyst" programs at investment banks.
I agree though. It'd be cool if I could be sure that the period had value.
I retained counsel and ultimately left the firm to work in the investor education department of an NGO. I had a conversation with a regulator, but it was clear that they were neither serious about pursuing it or adequately staffed to do so.