FTSE 100 still unpopular

Prism

itwasntme001 said:

Prism said:

itwasntme001 said:

Prism said:

Another_Saver said:

I've addressed the "no tech" argument in recent-ish posts (see https://www.google.com/url?sa=t&source=web&rct=j&url=https://site.warrington.ufl.edu/ritter/files/2015/04/Economic-growth-and-equity-returns-2005.pdf&ved=2ahUKEwi28pPFsoLtAhXHUBUIHSa-CwgQFjABegQIAhAB&usg=AOvVaw1Zw_jAH1fkqHZqiNRIosHd, referring to Buffett and Siegel that technological change rarely benefits the owners of capital unless there is a lasting monopoly, which rarely happens, rather tech benefits consumer through higher living standards). I argue this wider economic benefit is better picked up by owning consumer stocks, and other industries that benefit from tech than those who seek to capitalise on it. I've also made the point previously that the concept of technology and innovation is not limited to a category within capital markets - all companies are innovating all the time. Technology is not limited to what the FAANGS, mostly consumer media companies, can sell. Tech is not inherently "better" than non-tech co's - that is the same mindset behind those ridiculous "next job could be in cyber" ads.

I find it interesting that the only company in the tech space with a monopoly is the one that was found guilty of being a monopoly in an anti-trust case. The lead that Microsoft have with productivity software like Office and now Teams seems unassailable much of the time.

The rest is more competitive. Google and Facebook share advertising. Amazon and Microsoft share cloud platform and infrastructure. It will be interesting to see who wins the race to AI.. probably Google. These industries are very difficult to break into as the computing power required is vast and established. All of these companies make money when the rest of the industries have to use their technology to run their own stuff.

Technology is not just AI or GPUs or cloud platforms.  It is physical machinery that can enhance productivity 10x.  It is bio-engineering enhancing human life quality.  It is a whole spectrum of areas across a wide range of industries.  How much growth has been priced into today's common technology names?  How much juice is there left to be squeezed out of software and cloud computing?

I think it was a fair assumption to make that I was talking about the 'information technology' sector rather than the general term for technology. In that space there is a long way to go with software, AI and the cloud. In a few years time almost everything software based will in the cloud. It would likely be difficult to coax companies out of their existing providers data centre once they have moved in. 

But you were replying to someone debating about technology across different industries, not just in IT.  I agree that there has and will continue to be a movement towards centralized computing infrastructure.  But what is the point you are trying to make?  Everyone knows this.  Stocks are pricing in future expectations of earnings.  How much of this is already priced in?

I guess I see it as a shame that a huge chunk of the technology money, whether that is a pure IT play or any of those other industries flows back into a select few big US companies. If you are a UK company you pay a US company to host and run your compute, provide your core software and platforms, pay for your advertising. It has been that way for a while anyway but looking forwards its even more focused. There is little that ties any of this to the UK. The general purpose IT job role is diminished as there is little to manage and support.  Software developers can be based anywhere in the world. 

So since this thread is about the FSTE 100, I really can't think of a way that any of our companies can get in on the act in a big way. The cloud datacentre moat seems fully established. I am sure we will (and do) have some very successful companies who use technology in very effective ways. To be truely large - large enough to influence the top of the FSTE 100 - you need to build and operate that technology, not just use it to make and sell your stuff.

Thrugelmir

Prism said:

itwasntme001 said:

Prism said:

itwasntme001 said:

Prism said:

Another_Saver said:

I've addressed the "no tech" argument in recent-ish posts (see https://www.google.com/url?sa=t&source=web&rct=j&url=https://site.warrington.ufl.edu/ritter/files/2015/04/Economic-growth-and-equity-returns-2005.pdf&ved=2ahUKEwi28pPFsoLtAhXHUBUIHSa-CwgQFjABegQIAhAB&usg=AOvVaw1Zw_jAH1fkqHZqiNRIosHd, referring to Buffett and Siegel that technological change rarely benefits the owners of capital unless there is a lasting monopoly, which rarely happens, rather tech benefits consumer through higher living standards). I argue this wider economic benefit is better picked up by owning consumer stocks, and other industries that benefit from tech than those who seek to capitalise on it. I've also made the point previously that the concept of technology and innovation is not limited to a category within capital markets - all companies are innovating all the time. Technology is not limited to what the FAANGS, mostly consumer media companies, can sell. Tech is not inherently "better" than non-tech co's - that is the same mindset behind those ridiculous "next job could be in cyber" ads.

I find it interesting that the only company in the tech space with a monopoly is the one that was found guilty of being a monopoly in an anti-trust case. The lead that Microsoft have with productivity software like Office and now Teams seems unassailable much of the time.

The rest is more competitive. Google and Facebook share advertising. Amazon and Microsoft share cloud platform and infrastructure. It will be interesting to see who wins the race to AI.. probably Google. These industries are very difficult to break into as the computing power required is vast and established. All of these companies make money when the rest of the industries have to use their technology to run their own stuff.

Technology is not just AI or GPUs or cloud platforms.  It is physical machinery that can enhance productivity 10x.  It is bio-engineering enhancing human life quality.  It is a whole spectrum of areas across a wide range of industries.  How much growth has been priced into today's common technology names?  How much juice is there left to be squeezed out of software and cloud computing?

I think it was a fair assumption to make that I was talking about the 'information technology' sector rather than the general term for technology. In that space there is a long way to go with software, AI and the cloud. In a few years time almost everything software based will in the cloud. It would likely be difficult to coax companies out of their existing providers data centre once they have moved in. 

But you were replying to someone debating about technology across different industries, not just in IT.  I agree that there has and will continue to be a movement towards centralized computing infrastructure.  But what is the point you are trying to make?  Everyone knows this.  Stocks are pricing in future expectations of earnings.  How much of this is already priced in?

So since this thread is about the FSTE 100, I really can't think of a way that any of our companies can get in on the act in a big way. The cloud datacentre moat seems fully established. I am sure we will (and do) have some very successful companies who use technology in very effective ways. To be truely large - large enough to influence the top of the FSTE 100 - you need to build and operate that technology, not just use it to make and sell your stuff.

Hence why the expertise in financial services (in it's broadest sense) is so important to the UK economy. IBM ruled the computer main frame market 50 years ago. Invented the IBM Display writer, the forerunner to the PC some 40 years ago. Silicon Valley hasn't appeared overnight but has been established for a very long time. Focus on what you are good at. 

itwasntme001

Prism said:

itwasntme001 said:

Prism said:

itwasntme001 said:

Prism said:

Another_Saver said:

I've addressed the "no tech" argument in recent-ish posts (see https://www.google.com/url?sa=t&source=web&rct=j&url=https://site.warrington.ufl.edu/ritter/files/2015/04/Economic-growth-and-equity-returns-2005.pdf&ved=2ahUKEwi28pPFsoLtAhXHUBUIHSa-CwgQFjABegQIAhAB&usg=AOvVaw1Zw_jAH1fkqHZqiNRIosHd, referring to Buffett and Siegel that technological change rarely benefits the owners of capital unless there is a lasting monopoly, which rarely happens, rather tech benefits consumer through higher living standards). I argue this wider economic benefit is better picked up by owning consumer stocks, and other industries that benefit from tech than those who seek to capitalise on it. I've also made the point previously that the concept of technology and innovation is not limited to a category within capital markets - all companies are innovating all the time. Technology is not limited to what the FAANGS, mostly consumer media companies, can sell. Tech is not inherently "better" than non-tech co's - that is the same mindset behind those ridiculous "next job could be in cyber" ads.

I find it interesting that the only company in the tech space with a monopoly is the one that was found guilty of being a monopoly in an anti-trust case. The lead that Microsoft have with productivity software like Office and now Teams seems unassailable much of the time.

The rest is more competitive. Google and Facebook share advertising. Amazon and Microsoft share cloud platform and infrastructure. It will be interesting to see who wins the race to AI.. probably Google. These industries are very difficult to break into as the computing power required is vast and established. All of these companies make money when the rest of the industries have to use their technology to run their own stuff.

Technology is not just AI or GPUs or cloud platforms.  It is physical machinery that can enhance productivity 10x.  It is bio-engineering enhancing human life quality.  It is a whole spectrum of areas across a wide range of industries.  How much growth has been priced into today's common technology names?  How much juice is there left to be squeezed out of software and cloud computing?

I think it was a fair assumption to make that I was talking about the 'information technology' sector rather than the general term for technology. In that space there is a long way to go with software, AI and the cloud. In a few years time almost everything software based will in the cloud. It would likely be difficult to coax companies out of their existing providers data centre once they have moved in. 

But you were replying to someone debating about technology across different industries, not just in IT.  I agree that there has and will continue to be a movement towards centralized computing infrastructure.  But what is the point you are trying to make?  Everyone knows this.  Stocks are pricing in future expectations of earnings.  How much of this is already priced in?

I guess I see it as a shame that a huge chunk of the technology money, whether that is a pure IT play or any of those other industries flows back into a select few big US companies. If you are a UK company you pay a US company to host and run your compute, provide your core software and platforms, pay for your advertising. It has been that way for a while anyway but looking forwards its even more focused. There is little that ties any of this to the UK. The general purpose IT job role is diminished as there is little to manage and support.  Software developers can be based anywhere in the world. 

So since this thread is about the FSTE 100, I really can't think of a way that any of our companies can get in on the act in a big way. The cloud datacentre moat seems fully established. I am sure we will (and do) have some very successful companies who use technology in very effective ways. To be truely large - large enough to influence the top of the FSTE 100 - you need to build and operate that technology, not just use it to make and sell your stuff.

Monopolies or duopolies are nothing new.  Has happened in many other industries.  Eventually the tech companies will lose their moat because something new comes along.  Centralized computing has its limits, particularly in harvesting data to feed the bottom line.  Anti trust risks are not negligible.  FTSE100 stocks are more related to the real economy.  There will be a breaking point to this massively disinflationary trend we have been in (which goes hand in hand with the tech boom).  When the masses realise their purpose in society is becoming more and more diminished, we shall see some light to the end of centralization and de-humanization.  The real economy with real tangible jobs and purpose will eventually return.

Prism

itwasntme001 said:

Prism said:

itwasntme001 said:

Prism said:

itwasntme001 said:

Prism said:

Another_Saver said:

I've addressed the "no tech" argument in recent-ish posts (see https://www.google.com/url?sa=t&source=web&rct=j&url=https://site.warrington.ufl.edu/ritter/files/2015/04/Economic-growth-and-equity-returns-2005.pdf&ved=2ahUKEwi28pPFsoLtAhXHUBUIHSa-CwgQFjABegQIAhAB&usg=AOvVaw1Zw_jAH1fkqHZqiNRIosHd, referring to Buffett and Siegel that technological change rarely benefits the owners of capital unless there is a lasting monopoly, which rarely happens, rather tech benefits consumer through higher living standards). I argue this wider economic benefit is better picked up by owning consumer stocks, and other industries that benefit from tech than those who seek to capitalise on it. I've also made the point previously that the concept of technology and innovation is not limited to a category within capital markets - all companies are innovating all the time. Technology is not limited to what the FAANGS, mostly consumer media companies, can sell. Tech is not inherently "better" than non-tech co's - that is the same mindset behind those ridiculous "next job could be in cyber" ads.

I find it interesting that the only company in the tech space with a monopoly is the one that was found guilty of being a monopoly in an anti-trust case. The lead that Microsoft have with productivity software like Office and now Teams seems unassailable much of the time.

The rest is more competitive. Google and Facebook share advertising. Amazon and Microsoft share cloud platform and infrastructure. It will be interesting to see who wins the race to AI.. probably Google. These industries are very difficult to break into as the computing power required is vast and established. All of these companies make money when the rest of the industries have to use their technology to run their own stuff.

Technology is not just AI or GPUs or cloud platforms.  It is physical machinery that can enhance productivity 10x.  It is bio-engineering enhancing human life quality.  It is a whole spectrum of areas across a wide range of industries.  How much growth has been priced into today's common technology names?  How much juice is there left to be squeezed out of software and cloud computing?

I think it was a fair assumption to make that I was talking about the 'information technology' sector rather than the general term for technology. In that space there is a long way to go with software, AI and the cloud. In a few years time almost everything software based will in the cloud. It would likely be difficult to coax companies out of their existing providers data centre once they have moved in. 

But you were replying to someone debating about technology across different industries, not just in IT.  I agree that there has and will continue to be a movement towards centralized computing infrastructure.  But what is the point you are trying to make?  Everyone knows this.  Stocks are pricing in future expectations of earnings.  How much of this is already priced in?

I guess I see it as a shame that a huge chunk of the technology money, whether that is a pure IT play or any of those other industries flows back into a select few big US companies. If you are a UK company you pay a US company to host and run your compute, provide your core software and platforms, pay for your advertising. It has been that way for a while anyway but looking forwards its even more focused. There is little that ties any of this to the UK. The general purpose IT job role is diminished as there is little to manage and support.  Software developers can be based anywhere in the world. 

So since this thread is about the FSTE 100, I really can't think of a way that any of our companies can get in on the act in a big way. The cloud datacentre moat seems fully established. I am sure we will (and do) have some very successful companies who use technology in very effective ways. To be truely large - large enough to influence the top of the FSTE 100 - you need to build and operate that technology, not just use it to make and sell your stuff.

Monopolies or duopolies are nothing new.  Has happened in many other industries.  Eventually the tech companies will lose their moat because something new comes along.  Centralized computing has its limits, particularly in harvesting data to feed the bottom line.  Anti trust risks are not negligible.  FTSE100 stocks are more related to the real economy.  There will be a breaking point to this massively disinflationary trend we have been in (which goes hand in hand with the tech boom).  When the masses realise their purpose in society is becoming more and more diminished, we shall see some light to the end of centralization and de-humanization.  The real economy with real tangible jobs and purpose will eventually return.

You may be right in the long run - humans will eventually run out of work to do if we continue down this path - but for the near future the tech industry is pulling in a disproportionate amount of company profits, partly based on their own success and partly on their ability to profit of the success of others. Maybe that is priced in, who knows, but if the FTSE 100 stands any real chance of competing in investing terms, some of our companies had better find a way of getting in on the act. Share price multiple expansion is only going to get it so far without actual growth.

Compute right now is more distributed than it ever has been, with phones, cars, TVs and appliances all feeding data back and forth to the big data centres - where the real money is being made. I don't see that trend reversing.

Prism

Thrugelmir said:

Prism said:

itwasntme001 said:

Prism said:

itwasntme001 said:

Prism said:

Another_Saver said:

I've addressed the "no tech" argument in recent-ish posts (see https://www.google.com/url?sa=t&source=web&rct=j&url=https://site.warrington.ufl.edu/ritter/files/2015/04/Economic-growth-and-equity-returns-2005.pdf&ved=2ahUKEwi28pPFsoLtAhXHUBUIHSa-CwgQFjABegQIAhAB&usg=AOvVaw1Zw_jAH1fkqHZqiNRIosHd, referring to Buffett and Siegel that technological change rarely benefits the owners of capital unless there is a lasting monopoly, which rarely happens, rather tech benefits consumer through higher living standards). I argue this wider economic benefit is better picked up by owning consumer stocks, and other industries that benefit from tech than those who seek to capitalise on it. I've also made the point previously that the concept of technology and innovation is not limited to a category within capital markets - all companies are innovating all the time. Technology is not limited to what the FAANGS, mostly consumer media companies, can sell. Tech is not inherently "better" than non-tech co's - that is the same mindset behind those ridiculous "next job could be in cyber" ads.

I find it interesting that the only company in the tech space with a monopoly is the one that was found guilty of being a monopoly in an anti-trust case. The lead that Microsoft have with productivity software like Office and now Teams seems unassailable much of the time.

The rest is more competitive. Google and Facebook share advertising. Amazon and Microsoft share cloud platform and infrastructure. It will be interesting to see who wins the race to AI.. probably Google. These industries are very difficult to break into as the computing power required is vast and established. All of these companies make money when the rest of the industries have to use their technology to run their own stuff.

Technology is not just AI or GPUs or cloud platforms.  It is physical machinery that can enhance productivity 10x.  It is bio-engineering enhancing human life quality.  It is a whole spectrum of areas across a wide range of industries.  How much growth has been priced into today's common technology names?  How much juice is there left to be squeezed out of software and cloud computing?

I think it was a fair assumption to make that I was talking about the 'information technology' sector rather than the general term for technology. In that space there is a long way to go with software, AI and the cloud. In a few years time almost everything software based will in the cloud. It would likely be difficult to coax companies out of their existing providers data centre once they have moved in. 

But you were replying to someone debating about technology across different industries, not just in IT.  I agree that there has and will continue to be a movement towards centralized computing infrastructure.  But what is the point you are trying to make?  Everyone knows this.  Stocks are pricing in future expectations of earnings.  How much of this is already priced in?

So since this thread is about the FSTE 100, I really can't think of a way that any of our companies can get in on the act in a big way. The cloud datacentre moat seems fully established. I am sure we will (and do) have some very successful companies who use technology in very effective ways. To be truely large - large enough to influence the top of the FSTE 100 - you need to build and operate that technology, not just use it to make and sell your stuff.

Hence why the expertise in financial services (in it's broadest sense) is so important to the UK economy. IBM ruled the computer main frame market 50 years ago. Invented the IBM Display writer, the forerunner to the PC some 40 years ago. Silicon Valley hasn't appeared overnight but has been established for a very long time. Focus on what you are good at. 

Yes, financial services is an industry I don't have a great knowledge. I'm not sure what makes the UK especially strong in this area but it does seem that we are. I have investment exposure to companies like Impax and Starling through funds, but not really any of the big players.

itwasntme001

Prism said:

itwasntme001 said:

Prism said:

itwasntme001 said:

Prism said:

itwasntme001 said:

Prism said:

Another_Saver said:

I've addressed the "no tech" argument in recent-ish posts (see https://www.google.com/url?sa=t&source=web&rct=j&url=https://site.warrington.ufl.edu/ritter/files/2015/04/Economic-growth-and-equity-returns-2005.pdf&ved=2ahUKEwi28pPFsoLtAhXHUBUIHSa-CwgQFjABegQIAhAB&usg=AOvVaw1Zw_jAH1fkqHZqiNRIosHd, referring to Buffett and Siegel that technological change rarely benefits the owners of capital unless there is a lasting monopoly, which rarely happens, rather tech benefits consumer through higher living standards). I argue this wider economic benefit is better picked up by owning consumer stocks, and other industries that benefit from tech than those who seek to capitalise on it. I've also made the point previously that the concept of technology and innovation is not limited to a category within capital markets - all companies are innovating all the time. Technology is not limited to what the FAANGS, mostly consumer media companies, can sell. Tech is not inherently "better" than non-tech co's - that is the same mindset behind those ridiculous "next job could be in cyber" ads.

I find it interesting that the only company in the tech space with a monopoly is the one that was found guilty of being a monopoly in an anti-trust case. The lead that Microsoft have with productivity software like Office and now Teams seems unassailable much of the time.

The rest is more competitive. Google and Facebook share advertising. Amazon and Microsoft share cloud platform and infrastructure. It will be interesting to see who wins the race to AI.. probably Google. These industries are very difficult to break into as the computing power required is vast and established. All of these companies make money when the rest of the industries have to use their technology to run their own stuff.

Technology is not just AI or GPUs or cloud platforms.  It is physical machinery that can enhance productivity 10x.  It is bio-engineering enhancing human life quality.  It is a whole spectrum of areas across a wide range of industries.  How much growth has been priced into today's common technology names?  How much juice is there left to be squeezed out of software and cloud computing?

I think it was a fair assumption to make that I was talking about the 'information technology' sector rather than the general term for technology. In that space there is a long way to go with software, AI and the cloud. In a few years time almost everything software based will in the cloud. It would likely be difficult to coax companies out of their existing providers data centre once they have moved in. 

But you were replying to someone debating about technology across different industries, not just in IT.  I agree that there has and will continue to be a movement towards centralized computing infrastructure.  But what is the point you are trying to make?  Everyone knows this.  Stocks are pricing in future expectations of earnings.  How much of this is already priced in?

I guess I see it as a shame that a huge chunk of the technology money, whether that is a pure IT play or any of those other industries flows back into a select few big US companies. If you are a UK company you pay a US company to host and run your compute, provide your core software and platforms, pay for your advertising. It has been that way for a while anyway but looking forwards its even more focused. There is little that ties any of this to the UK. The general purpose IT job role is diminished as there is little to manage and support.  Software developers can be based anywhere in the world. 

So since this thread is about the FSTE 100, I really can't think of a way that any of our companies can get in on the act in a big way. The cloud datacentre moat seems fully established. I am sure we will (and do) have some very successful companies who use technology in very effective ways. To be truely large - large enough to influence the top of the FSTE 100 - you need to build and operate that technology, not just use it to make and sell your stuff.

Monopolies or duopolies are nothing new.  Has happened in many other industries.  Eventually the tech companies will lose their moat because something new comes along.  Centralized computing has its limits, particularly in harvesting data to feed the bottom line.  Anti trust risks are not negligible.  FTSE100 stocks are more related to the real economy.  There will be a breaking point to this massively disinflationary trend we have been in (which goes hand in hand with the tech boom).  When the masses realise their purpose in society is becoming more and more diminished, we shall see some light to the end of centralization and de-humanization.  The real economy with real tangible jobs and purpose will eventually return.

You may be right in the long run - humans will eventually run out of work to do if we continue down this path - but for the near future the tech industry is pulling in a disproportionate amount of company profits, partly based on their own success and partly on their ability to profit of the success of others. Maybe that is priced in, who knows, but if the FTSE 100 stands any real chance of competing in investing terms, some of our companies had better find a way of getting in on the act. Share price multiple expansion is only going to get it so far without actual growth.

Compute right now is more distributed than it ever has been, with phones, cars, TVs and appliances all feeding data back and forth to the big data centres - where the real money is being made. I don't see that trend reversing.

Humans will never run out of work.  There will always be work to do.  When you have reduced prospects due to big tech squeezing profit margins and outsourcing of labour, your gonna get a lot of angry people building up over time.  Recent politics is just the start.  Wealth concentration will eventually reverse and with that big changes in the structure of our economies over time.  Perhaps these changes will result in de-centralization and more locally sustained economies.

Another_Saver

This has become eerily philosophical for a FTSE 100 discussion

TBC15

So hands up who’s got a FTSE 100 tracker.

itwasntme001

I sold mine at the peak last year.

TBC15

itwasntme001 said:

I sold mine at the peak last year.

Nice timing, but was it worth the bother?