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The timing, as these things often are, was impeccable. We were in the early stages of the pandemic, interest rates were scraping the bottom of the barrel, and governments were essentially printing money like it was going out of style. It created a sort of speculative froth that swept through everything – stocks, property, tulips, you name it. Everything seemed possible, and a digital token based on a breed of dog was as good a candidate for improbable success as any.

Now, old Peter Thiel, a chap with a knack for spotting a winning hand – he co-founded PayPal, you know, and later Palantir Technologies, a name that conjures images of rather clever data sorting – had been amongst these enthusiastic investors. He’d been accumulating shares in the usual suspects – Nvidia, Amazon, Microsoft – a portfolio that suggested a firm belief in the power of the silicon chip. He even had a first look at Facebook, now Meta Platforms, a move that proved rather profitable, I gather.

The weighted average purchase price, as dictated by the SEC Form 4, was a mere $6.25. A pittance! One can almost hear the coins weeping. The closing price on February 24th, $6.56, offers a slight reprieve, but does little to soothe the soul of a discerning investor. It is a market built on illusions, after all.

Here’s the breakdown, for those who like that sort of thing. I’m more of a ‘feeling’ person, but one must appear to be informed.

They released their fourth-quarter report, and the initial reaction was… hopeful? Then reality set in, and the stock price did that little dip-and-sway thing it does. It reminded me of trying to parallel park a U-Haul. A lot of effort for minimal gain. My colleague, Brenda, who genuinely believes in disruptive technology, was practically vibrating with enthusiasm. I just offered her a stale donut and tried to avoid eye contact.

The significance of this impending report is not, of course, merely numerical. It touches upon reputation, upon the delicate balance between progress and prudence, and, naturally, upon the fortunes of those who have invested their confidence – and their capital – in the company’s prospects. That some fourteen incidents involving the unsupervised operation of these vehicles have come to light since June of the previous year does add a certain…complexity to the situation.

One asks oneself, is this a seed worth planting for the long winter?

The Cyclically Adjusted Price-to-Earnings (CAPE) ratio, calculated using the S&P 500, currently stands at approximately 40. This represents a significant premium to its historical average of around 17, and approximates levels observed during the late stages of the 1999 technology bubble. Such elevated multiples suggest a diminished margin of safety for investors. The historical record demonstrates a tendency for market corrections following periods of extended valuation expansion.