A quick recap of a recent conversation on Telegram that revolved around the Tech ecosystem and the current investing landscape for the space.
Tech Landscape & Market [Telegram]
Recap: Fast followers in Tech tend to improve on the first mover and reap rewards. The current market environment is particularly conducive for Tech
Comment: Tech companies are the main ones investing and creating value. Be wary of tech posers (e.g. WeWork - real estate company posing as Tech) - gross margins are a key indicator (worthwhile read here)
First movers, in Tech, often fail. Second mover tends to win/reap rewards
Today, big Tech companies (AMZN, FB, GOOG, NFLX, AAPL, etc.) have a ton of cash, and a lot of innovation is now occurring in-house
Recommended book: In the Plex: How Google Thinks, Works, and Shapes Our Lives
Backdrop for QQQ (Tech stock index) has been/is positive: interest rates are near 0% (low discount rate); USD is the world reserve currency (everyone needs it); Technology adoption is accelerating in a WFH environment (fundamentals); Tech companies, in general, have clean balance sheets (cash; limited debt)