As uncomfortable as this may be for the tech industry, I have been hoping for AI related stock prices to come back to reality. A market correction is a healthy thing so long as it doesn't turn into a collapse. IMO, some AI companies have ludicrous valuations considering their astronomical debt. A reality check may be healthy long term.
IMO OpenAI jumped the gun and rushed an immature product to be there first, no matter the costs. The other players saw it as a threat, and started running with the same carelessness. It has been spiraling since then, and while the product keeps improving, their business model hasn't demonstrated sustainability.
Their CEOs know it, and they must have their end game. I'd hate to think they'll just keep running until a hard crash. Hopefully small corrections will slow this down in a more controlled manner.
> Yeah I'm not sure how Anthropic is going to IPO at this rate...
There are plenty of suckers willing to gamble on a failing business (massive and rapidly growing debts, assets that can easily be cloned, no realistic path to profitability), so I don't think an IPO is off the table.
Not sure if you're joking, but I go back and forth between this thought. Finance is not my forte, far from it for sure, but there's a part of me that hopes a collapse can at least open the door for future opportunity. A "reset" if you will. The younger generations are up against a massive wall when it comes to acquiring wealth (or even a reasonable means of living at this point), it would be nice to give them an equal chance. I know this is very likely a naive take, but it's the only hopeful aspect of a collapse I can accept.
There's not much incentive for institutional change when everyone's making money. Yeah, it'll hurt folks a great deal short term. But may be better for our kids long term.
The inflation being caused by all the "crowding-out" caused by AI overinvestment is currently incredibly harmful.
That really needs to unwind.
However much potential energy has been stored in it, is going to turn into kinetic energy in the subsequent correction/crash.
The best time for this to happen is as soon as possible, causing the least amount of damage.
I pretty much expect the damage to be immense, though, but that is going to be unavoidable at this point. However big the bubble is, it needs to pop.
In retrospect, we will find that there were truly idiotic decisions made in blowing up the bubble, and in the aftermath the wrong people will almost certainly get hurt, because that is just what we do these days.
That's what people said in 2008, instead, wealth was incinerated, the most vulnerable got hurt the most, while the already wealthy got bailed out and bought back assets at bargain bin prices. The wealth owning class would love a collapse.
Also don't be discouraged by these anti-datacenter clowns. Most normal people don't understand where their doomscroll gets pumped out of every day and thinks the internet comes from their phone. These are the same people who are anti-powerplant and think electricity comes from a wall outlet.
Doom scrolling is nothing good for society and it’s with us only because extremely well funded organisations make money from it, and has weaponised it against the general population.
I am a high voltage tester and know electricity very well.
What kind of dogshit take is this? AI datacenters are a very different breed of facility in terms of their effect on their surrounding communities. Colossus is literally poisoning South Memphis.
IT Sovereignty is likely to be a growing trend after the past few years - including issues of Election interference not just by governments but by individual Tech CEOs. I think a lot of particularly Europeans have realized that putting all your eggs in American jurisprudence might -not- be the best way to go.
Cloudflare has a moat but it already smells like sewage.
Cloudflare is not competing with app builders like Lovable or Repl though. They are the underlying infrastructure for companies like that. This is why they will win in the AI era.
They're saying that it's trivial for Cloudflare to go up the stack (build Replit) while it's non-trivial for Replit to go down the stack (build Cloudflare).
Neither are trivial but I would wager cloudflare is the easiest to replace because it's the most mechanical and price sensitive.
It's like VPN service. Some other party comes along and offers it at 40% of the cost, you can do that.
Lovable is more nuanced. It takes more to move away, and there's just no reason to. The unit cost of Lovable buyeres is negligible aka less buyer sensitivity
And the reason for Cloudflare to do it is because there are several (apparently) very juicy businesses to be built by slapping a chat UI and off the shelf coding agent on top of Cloudflare infra... Not saying they should do this, but the rationale is pretty self-evident.
The reason for Replit to try going down the stack is platform risk and compressing margins from competitors who also have the brilliant idea of slapping a text box and off the shelf coding agents onto Cloudflare.
During the dot-com boom, Cisco was the underlying infrastructure of the Internet. A lot of investors that believed themselves to be savvy bought Cisco stock. Their reasoning was that individual dot-com startups may go under, but the Internet itself was here to stay. In practice, the Cisco stock price peaked in March 2000, and anyone who invested at the peak would not have broken even (in nominal dollars, not real dollars) until December 2025.
The investors were right that the Internet would be important, and that Cisco would continue to be an important manufacturer of networking infrastructure. This just fundamentally did not matter because after the dot-com bubble popped, the market decided that Cisco simply wasn't worth the price it was selling at during the height of the bubble.
In an April 2002 interview with Bloomberg Businessweek, Scott McNealy, then CEO of Sun Microsystems, reflected on investors paying 10x revenue for Sun stock at its dot-com peak ($64/share in 2000):
At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10 years, I can maintain the current revenue run rate. Now, having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those basic assumptions are? You don't need any transparency. You don't need any footnotes. What were you thinking?
Now this analysis is imperfect... but it's good enough.
That assumes 100% of Internet can or would be willing to adopt Cloudflare, which has no real basis.
The EU is finally waking up to the fact that putting all its eggs in the U.S. basket is a bad thing. China is enormous, and they're not going to go all in on Cloudflare either for a myriad of reasons. And a bunch of folks just don't like nor want to do business with the company and its CEO.
What does that even mean? Revenue is measured in dollars not in % of internet traffic. They could "own" 100% of internet traffic and still have growing revenue.
Ever looked at MSFT or AAPL’s dividends? It’s a token “here’s your fucking dividend, now go away” percentage. (I’m sure it’s actually to placate funds that require a dividend, but I repeat myself.)
As a retired ‘softie, my spouse still holds a fair bit of MSFT, so I just looked: $0.98…on a $540.00 stock. Yeah, we won’t be living off that in our old age.
Why would you want a dividend? It’s mathematically better for a business to do share buybacks and allow investors to choose when to sell shares so they can minimize tax liability.
Given how much people have started actively looking for alternatives, and how much spray-and-pray Cloudflare's offerings now seem with so many launches every few weeks, steal is a bit too optimistic.
Stopping DC rollout effectively works as calling the bluff of AI.
AI is a hyped up nothing burger? AI demand retreats, lots of vacant compute, revenues sink (and the DC hold ends up being a (small) blessing in disguise for the labs).
AI lives up to it's hype? AI demand surges, capacity is severely constrained, margins explode as inference costs soar (and the DC block ends up being counter productive knee-jerk behavior)
The only way this plays out in anti-AI favor is if people stop using AI and demand goes down. Even if it flatlines, labs can rebalance towards inference and start harvesting those huge margins.
I don't agree with your description of how the ban is going to be counterproductive.
There won't be massive inference margins. The DCs will get built, in some other country. And in all likelihood they will continue to be built elsewhere even after the block is lifted.
I'm starting to use it quite heavily and extremely productively for non R&D and non SWE work. It has transformed one aspect of my business, and that won't change -- this type of usage is highly productive, and only likely to grow.
Whenever I see daily stock results I try to reframe it in a longer term. Interestingly, Nasdaq is only up ~4% YoY.
This is surprising to me, given how much acceleration there has been in AI capabilities since the same time last year. I guess costs and risks are accelerating just as fast.
Stocks have been somewhat flat this year. Some big gains, but a lot of stagnation around the time the Iran war began. I got my hopes up yesterday, but the crash today puts us back to ~May depending on which index you're looking at.
The problem is that the economy is kinda flatlining and only the AI bubble (that is also hoovering up other, seemingly unrelated parts of the tech sector) is what makes this number as big as it is.
Beware any simple narrative for the decline of a massively complex market.
Did the election matter at all for this trade? This trade has been in the works for the last 2-3 years. This correction is required to bring down inflation - and we're already seeing T-notes dropping lower which will decrease mortgage costs in the near term and allow for more liquidity for consumers for home equity loans.
I don't understand why folks continue to click-through and "buy" these overly simplistic narratives from news outlets.
The thing you're missing is that the political expenditure of AI in the US is massively tied with the GOP and the far right. There's a reason why people like Elon Musk have been absolutely freaking out over the result.
This result means that unlimited data center expansion may not be on the table, and bailouts certainly aren't either. So with the leaders crashing out the uncertainty of AI expansion is now being properly priced into the stock.
I'm not missing it, I assure you. The politics was just not a huge factor in any larger sense in my opinion. The GOP tie-up was ALSO a narrative. (Though obviously folks thought the President would help with de-regulation, etc)
In the end, States and their utility regulators have to be on board with large data center deployments. Some GOP-led states were often friendly to builders, but their citizens realized what was happening and the backlash was going to happen anyway because of electricity prices. It's just one more nail in the coffin from a cost-of-living perspective, and the utilities hadn't yet passed the costs on to their customers (but it will pop up soon).
States that were led by Democrats were already pushing back for their own regulatory regimes for energy cost recovery, etc. Data centers were wildly unpopular at a STATE level, so it didn't really matter what was going to happen at the federal level.
Democrats are not going to try and stop AI or rein in AI. There is too much money at stake. They'll pass some regulations, sure, some data center rollouts might be blocked or modified, but they aren't going to stop the train.
Well, don't forget this is also about national security. China/state of choice AI going after your infrastructure & national secrets is going to take AI to defend against.
There's zero chance AI datacentres are going away, they are unfortunately a national security necessity now.
I was going to say that Democrats have no power to uphold laws, that's up to the executive and the national executive hasn't changed.
On the other hand a number of governors have changed (Texas in particular just went to a Democrat, and there are SpaceX interests there). They by definition can't prosecute on a federal level but they do hold some enforcement power.
Many safe and good technologies were successfully sabotaged for populist and stupid political reasons, e.g. in nuclear power. Or less spectacular, think of the welfare loss due to the NIMBY-fied housing market.
The financial aspect/discourse is for the proletariat who prefer to pretend politics and risk of military conflict do not exist.
They won't stop it because China won't stop. Politicians have to avoid any appearance of xenophobia though (and to be certain many are personally not xenophobic, just saying optics matter to them), so they talk about jobs and wealth inequality as euphemism for ground truth; we aren't secure putting all our eggs in the China basket.
Arguably screwed up there already letting chips and robotics flow offshore while we focused on increasingly useless education in developer syntax and semantics.
They will cool the AI investment well aware technology improves and we probably don't really need all our investment eggs in that one basket then
They don't have to. This particular train explodes on its own if it drop below 100 mph.
Even tepid regulation will destroy the "our TIA is the entire observable universe due to the potential of self replicating AI probes so we totally deserve 10 trillion dollars in investor capital" trade
I've seen this movie. I think it was called "The Bus That Couldn't Slow Down". It had Keanu Reaves and Sandra Bullock. IIRC it didn't end well for the bus.
They aren't going to stop AI, but they are not going to let the owners of the superintelligence inference engines become god emperors of the planet, and in that case why not just get 4.5% on some bonds?
They're not even going to do that. Trump isn't going to sign that. When was the last time Congress overrode a veto or played hardball (well the Democratic side anyway)? They have no fight in them.
> This is clearly voter sentiment about AI in general and big tech in general.
There is growing public sentiment about AI & Tech, but per exit polls that wasn't a Top 3 reason swing voters went blue (Economy, Wars, Corruption). Today's market correction is being driven by the majority in both houses of congress flipping blue. Trump and most Republican legislators were seen as broadly supporting AI / Tech and most Democrats are seen as being less supportive.
AI / Tech-friendly legislation is now likely to face a slower, more difficult path through committee and passage. IMHO, the actual impact of the political change is nowhere near 5% of company value, but outsized swings tend to happen on any adverse news when the market is already fearful they've bought into a high-priced bubble far in advance of actual earnings.
My definition for an Agent is "a marketing term for long running LLM Chat sessions that has increased access to use your computer to complete tasks it cannot otherwise do by itself".
That's my attempt at a universal definition for technical and non-technical users. How does it compare?
It's not only about the people who were elected, but 44/45 ballot initiatives specifically aimed at restricting or banning data center construction passed.
The Trump administration was expected to invest massively into AI, and money invested into AI is effectively free money for AI company shareholders, that free money is priced in the stocks. With the change in direction, investments are expected to be less, which means less free money, and therefore less valuable stocks.
Great opportunity to buy the dip in a couple of weeks. If anyone thinks they can slow down or stop AI adoption by banning data centers, good luck with that... The Chinese built an AI empire with much less compute that exists today in the US.
Also, people don't have issue with data centers. They have issues with AI cause they think it's gonna make them unemployed, which is a real worry I can relate to. I just don't think that banning data centers or AI progress in general would help anyone keeping their job.
And is actually the only thing I’m sad about in this whole thing. Ecstatic about the blue wave sad that they’re going to restrict AI progress. It’s the future, and it would be a horrible move to curtail it.
AI progress doesn't require doing it full ahead right now. Beyond the risks of getting out of control, you get bubbles if hype goes beyond economic reality. AI should be done more slowly with regulation and slower build out. Better to do it slowly than wreck the world with unexamined consequences.
Personally, I think that the idea that market always recovers is so widespread right now that it'll take some serious financial hardships for people to start selling instead of buying the dip.
With the housing bubble, it was because people owned multiple homes then struggled to pay two mortgages as economic conditions degraded, and banks were willing to absorb losses if the homes were sold below the cost of the mortgage.
What is encouraging people to route from the stock market? Bond yields aren't high enough yet to encourage people to retreat from stocks, and there's no other alternative investments. Plus, so much of the S&P is held in 401ks. And I agree, economic hardship is not widespread enough for people with significant investment holdings to start selling them off to live. Those who are struggling are those who used to be struggling too (thus, no extra money for investments).
Their CEOs know it, and they must have their end game. I'd hate to think they'll just keep running until a hard crash. Hopefully small corrections will slow this down in a more controlled manner.
There are plenty of suckers willing to gamble on a failing business (massive and rapidly growing debts, assets that can easily be cloned, no realistic path to profitability), so I don't think an IPO is off the table.
https://www.youtube.com/watch?v=0k5aVLi_yhM
When the market crashes, a lot of people lose jobs, and a lot of people die. Everyone suffers but those with money suffer the least, by far.
That really needs to unwind.
However much potential energy has been stored in it, is going to turn into kinetic energy in the subsequent correction/crash.
The best time for this to happen is as soon as possible, causing the least amount of damage.
I pretty much expect the damage to be immense, though, but that is going to be unavoidable at this point. However big the bubble is, it needs to pop.
In retrospect, we will find that there were truly idiotic decisions made in blowing up the bubble, and in the aftermath the wrong people will almost certainly get hurt, because that is just what we do these days.
AI is not going anywhere and will only grow more and more.
Doom scrolling is nothing good for society and it’s with us only because extremely well funded organisations make money from it, and has weaponised it against the general population.
I am a high voltage tester and know electricity very well.
Regardless of what happens to the AI models, you will still need protection a decade from now.
Not to mention the most comprehensive platform to use with AI, they will inevitably eat Lovable / Repl's lunch.
[1] https://finance.yahoo.com/quote/NET/cash-flow/
As an example, Palantir has a similar cash flow / market cap ratio. I didn't check many others.
Cloudflare has a moat but it already smells like sewage.
Lovable is hosted on Cloudflare: https://x.com/CloudflareDev/status/2113651157721600492
It's like VPN service. Some other party comes along and offers it at 40% of the cost, you can do that.
Lovable is more nuanced. It takes more to move away, and there's just no reason to. The unit cost of Lovable buyeres is negligible aka less buyer sensitivity
It takes decades to build the kind of network cloudflare has.
“Please mr bezos, can I connect my new trivial network to yours?” “0.08/GB :)”
Cloudflare is B2B focusing on enterprise sales and underlying cloud infrastructure. These app builder companies are basically B2C and lower end B2B.
Staying in your lane is often a better choice.
Maybe expanding through acquisition is the best of both worlds. So replit might be bought.
Network effects make it harder for Cloudflare to build Replit than it might seem, too.
And the reason for Cloudflare to do it is because there are several (apparently) very juicy businesses to be built by slapping a chat UI and off the shelf coding agent on top of Cloudflare infra... Not saying they should do this, but the rationale is pretty self-evident.
The reason for Replit to try going down the stack is platform risk and compressing margins from competitors who also have the brilliant idea of slapping a text box and off the shelf coding agents onto Cloudflare.
The investors were right that the Internet would be important, and that Cisco would continue to be an important manufacturer of networking infrastructure. This just fundamentally did not matter because after the dot-com bubble popped, the market decided that Cisco simply wasn't worth the price it was selling at during the height of the bubble.
At 10 times revenues, to give you a 10-year payback, I have to pay you 100% of revenues for 10 straight years in dividends. That assumes I can get that by my shareholders. That assumes I have zero cost of goods sold, which is very hard for a computer company. That assumes zero expenses, which is really hard with 39,000 employees. That assumes I pay no taxes, which is very hard. And that assumes you pay no taxes on your dividends, which is kind of illegal. And that assumes with zero R&D for the next 10 years, I can maintain the current revenue run rate. Now, having done that, would any of you like to buy my stock at $64? Do you realize how ridiculous those basic assumptions are? You don't need any transparency. You don't need any footnotes. What were you thinking?
Now this analysis is imperfect... but it's good enough.
For reference Cloudflare trades at 39x revenue
Obviously you wouldn't pay 10x revenue if you expect revenue to be flat for the next 10 years.
No wonder that company no longer exists with a CEO that doesn't get that.
According to these figures, their growth is levelling off.
https://news.ycombinator.com/item?id=50382740
And nowhere near enough to sustain that valuation, particularly in a market which is near the end of a bull run.
The EU is finally waking up to the fact that putting all its eggs in the U.S. basket is a bad thing. China is enormous, and they're not going to go all in on Cloudflare either for a myriad of reasons. And a bunch of folks just don't like nor want to do business with the company and its CEO.
Here's the valuation though. Percentage of total web traffic going through Cloudflare.
- 2016 ~3.9%
- 2017 ~5.3%
- 2018 ~6.6%
- 2019 ~7.6%
- 2020 ~11.2%
- 2021 ~15.4%
- 2022 ~19.4%
- 2023 ~18.0%
- 2024 ~18.9%
- 2025 ~19.2%
- 2026 (early) ~20.9% (with later snapshots higher, up to the mid-to-high 20s)
Combine that with consistently excellent execution and popularity, you get the valuation.
You're confusing market share with valuation. Also, look into business cycle theory from marathon asset management.
The four most dangerous words in finance "this time is different"
https://giftarticle.ft.com/giftarticle/actions/redeem/8605e6...
Share buybacks are always better for the company and investors.
As a retired ‘softie, my spouse still holds a fair bit of MSFT, so I just looked: $0.98…on a $540.00 stock. Yeah, we won’t be living off that in our old age.
And frankly, they should basically be a commodity.
If anything, AWS or MS or other parties make it about as profitable as hosting web pages.
Also owned a bunch of asml shares a decade or so ago. But it didn’t really move so got bored and sold. Good picks bad patience.
AI is a hyped up nothing burger? AI demand retreats, lots of vacant compute, revenues sink (and the DC hold ends up being a (small) blessing in disguise for the labs).
AI lives up to it's hype? AI demand surges, capacity is severely constrained, margins explode as inference costs soar (and the DC block ends up being counter productive knee-jerk behavior)
The only way this plays out in anti-AI favor is if people stop using AI and demand goes down. Even if it flatlines, labs can rebalance towards inference and start harvesting those huge margins.
There won't be massive inference margins. The DCs will get built, in some other country. And in all likelihood they will continue to be built elsewhere even after the block is lifted.
This is surprising to me, given how much acceleration there has been in AI capabilities since the same time last year. I guess costs and risks are accelerating just as fast.
Did the election matter at all for this trade? This trade has been in the works for the last 2-3 years. This correction is required to bring down inflation - and we're already seeing T-notes dropping lower which will decrease mortgage costs in the near term and allow for more liquidity for consumers for home equity loans.
I don't understand why folks continue to click-through and "buy" these overly simplistic narratives from news outlets.
This result means that unlimited data center expansion may not be on the table, and bailouts certainly aren't either. So with the leaders crashing out the uncertainty of AI expansion is now being properly priced into the stock.
In the end, States and their utility regulators have to be on board with large data center deployments. Some GOP-led states were often friendly to builders, but their citizens realized what was happening and the backlash was going to happen anyway because of electricity prices. It's just one more nail in the coffin from a cost-of-living perspective, and the utilities hadn't yet passed the costs on to their customers (but it will pop up soon).
States that were led by Democrats were already pushing back for their own regulatory regimes for energy cost recovery, etc. Data centers were wildly unpopular at a STATE level, so it didn't really matter what was going to happen at the federal level.
There's zero chance AI datacentres are going away, they are unfortunately a national security necessity now.
It's the "if we don't they will" thing again.
I’m convinced the best thing that happened in the nuclear arms race is the beginning of a dialogue that resulted in the start and salt treaties.
Ai obviously needs something similar.
On the other hand a number of governors have changed (Texas in particular just went to a Democrat, and there are SpaceX interests there). They by definition can't prosecute on a federal level but they do hold some enforcement power.
They won't stop it because China won't stop. Politicians have to avoid any appearance of xenophobia though (and to be certain many are personally not xenophobic, just saying optics matter to them), so they talk about jobs and wealth inequality as euphemism for ground truth; we aren't secure putting all our eggs in the China basket.
Arguably screwed up there already letting chips and robotics flow offshore while we focused on increasingly useless education in developer syntax and semantics.
They will cool the AI investment well aware technology improves and we probably don't really need all our investment eggs in that one basket then
Even tepid regulation will destroy the "our TIA is the entire observable universe due to the potential of self replicating AI probes so we totally deserve 10 trillion dollars in investor capital" trade
Sobriety the following day,
$8,000 for a video card,
Empty boxes on Christmas day.
Can't even rhyme without AI anymore.
Wind blows over clear acres
Buildouts are now dead?
Micron a little as well,
AI corps with their hands out ?
they can go to hell. :}
Cost me 3090
Dunno why I did dis
Guess let's try and see
you see that investment has parlayed. :}
The models still hallucinate,
I asked AI to write this poem,
Now I have to validate.
Most voters don’t know what agents are. Many of my coworkers in tech can’t even define “agent” correctly.
So no, the world is likely not suddenly agreeing with you about “jagged performance.”
There is growing public sentiment about AI & Tech, but per exit polls that wasn't a Top 3 reason swing voters went blue (Economy, Wars, Corruption). Today's market correction is being driven by the majority in both houses of congress flipping blue. Trump and most Republican legislators were seen as broadly supporting AI / Tech and most Democrats are seen as being less supportive.
AI / Tech-friendly legislation is now likely to face a slower, more difficult path through committee and passage. IMHO, the actual impact of the political change is nowhere near 5% of company value, but outsized swings tend to happen on any adverse news when the market is already fearful they've bought into a high-priced bubble far in advance of actual earnings.
That's my attempt at a universal definition for technical and non-technical users. How does it compare?
The Trump administration was expected to invest massively into AI, and money invested into AI is effectively free money for AI company shareholders, that free money is priced in the stocks. With the change in direction, investments are expected to be less, which means less free money, and therefore less valuable stocks.
Remember the frenzy before the .com bubble? The nerds were finally winning! The housing one? Finally everyone could afford a house!
AI bubble? Layoffs for everyone, techbros turned fascists, impending doom somehow as a selling point. Like, wtf?
Of course the consequences were always shit, but that's a given in an economic crisis.
The earlier it burns the better, because every day the bubble only grows larger otherwise.
Also, people don't have issue with data centers. They have issues with AI cause they think it's gonna make them unemployed, which is a real worry I can relate to. I just don't think that banning data centers or AI progress in general would help anyone keeping their job.
We curtail literally millions of these "futures" every day around the world. They are called children. They are the literal future of humanity.
Accurate. [0]
[0] https://news.ycombinator.com/item?id=45960032
Personally, I think that the idea that market always recovers is so widespread right now that it'll take some serious financial hardships for people to start selling instead of buying the dip.
With the housing bubble, it was because people owned multiple homes then struggled to pay two mortgages as economic conditions degraded, and banks were willing to absorb losses if the homes were sold below the cost of the mortgage.
What is encouraging people to route from the stock market? Bond yields aren't high enough yet to encourage people to retreat from stocks, and there's no other alternative investments. Plus, so much of the S&P is held in 401ks. And I agree, economic hardship is not widespread enough for people with significant investment holdings to start selling them off to live. Those who are struggling are those who used to be struggling too (thus, no extra money for investments).