1/ Some thoughts on financial storms I seeing brewing ahead. I expect 6000 point drop in aggregate in months ahead. Here’s why.
— Shervin Pishevar (@shervin) February 6, 2018
Shervin Pishevar has been busy publishing his thoughts and predictions – from the future of the U.S. economy and the roller coaster of Bitcoin, to the giants of Silicon Valley. He’s addressed a substantial amount of insights, and all on his Twitter account. The stream of 50 Tweets carries loose structuring and includes a rather poignant understanding of the economy of Silicon Valley.
And all of these tweets appeared on the eve of a stock market meltdown, a prime example of the upcoming pain Pishevar predicts we may see in the markets.
It started with the Dow on Thursday, down 450 points before most stock brokers finished their first coffee. Then the hurt continued, with a precarious, stunning drop thanks to a massive sell-off where bond yields rose, industrials fell, and everyone on the exchange floor wondered if the ship would right itself before lunchtime.
In Shanghai this morning Chinese shares had their largest single-day fall since a brutal summer rout three years ago, in a dramatic reaction to the latest slump on Wall Street.
“I am numb and speechless. This reminds me of the stock market disaster in 2015,” said Robert Gu, a 47-year old veteran investor from the eastern city of Nanjing. The market’s crash in 2015 wiped out 45% of Chinese stocks’ value in slightly over two months.
For Pishevar, it was a chance to remind followers of how cheerleading, even by the President, can’t control the course of the world’s most powerful financial institution. His first pinned tweet, which predicted a loss of 6,000 points in upcoming months, seemed especially prophetic.
He says that “Just like Ma Bell, these 5 giants have too much power, stifling startups. Uber might be the last giant to eke out before it was too late.”
The giants he’s talking about are Alphabet, Apple, Amazon, Facebook, and Microsoft.
And Ma Bell is the colloquial verbiage once used to refer to the conglomerate and monopoly-holding Bell System. He alludes to a stifled and unbending future, “We might not see another Uber or Airbnb scale business for 10+ year unless the Modern Ma Bells are restrained from their absolute power.”
He points out that the “Single digit unicorns are not unicorns. Today’s billion exit is yesterday’s $100m exit. People running victory laps while they get lapped.” There are restrictions in the terms of achievement in these current startups. He says, “We’ll have 5 robber barons destroying one startup after another. Small acquisitions are silent assassinations. Reduced TAMs slow deaths.” Those that do make it beyond acquisition don’t have a clear fate. They could be fighting for their lives if their product has semblance to that of the giants.
Speaking towards a future for the sake of the economy and for the loosening of grips, Shervin Pishevar says “Breaking up Ma Bell unleashed many companies and was what was best for consumers.” Further, “These Modern Ma Bells have much more power than Ma Bell ever did. Extreme amounts of power with access to data no sovereign has.” This leaves room for little competition, given that the giants have resources far beyond the reach of typical startups. When a startup rises and looks to move towards the territory of the giants, the giants take notice. He says,
“They have the power of a nation-state to destroy vulnerable start-ups threatening their monopolies. They’ll use that great power overtly+covertly.”
He puts some of the blame for this on the government: “US has allowed these monopolies to rise, now with cash abroad repatriated their power grows. Witness cities begging for Amazon business.”
This isn’t the first time that Shervin Pishevar has let us into his stream of consciousness. In 2008, Pishevar wrote an email to friends during a trip in Eastern Europe. He starts, “I find myself in a hotel in Eastern Europe after 3 days of red-eye flights across 8 time zones on a secret mission for my startup.” At the time, he was recruiting a youth coder from Romania for SGN. In the email, he hits on the topic of one of the giants, Facebook. Regarding its employees, Pishevar says “They are and should be on a mission to innovate around and extend Zuckerberg’s genius and make it even more elegant, relevant, personal and inspiring. Facebook is not a technology. It is not a portal. It is not a media company. Facebook is a new form of human communication.”
Pishevar goes on to talk about the global and disbursed aspect of communication through the tool of Facebook. He brings games into the fold, saying “I see Social Games as also a new form of communication and entertainment as important as email, instant messenger and television.” Sleep-deprived and away from his children, Pishevar delves deep into the meaning of these connections, and how they extend utterly beyond geographics and surmound barriers. The thought lingers to his present-day Tweets, one of which says
“Founders are stateless, boundary-less capable of raising capital from completely new financial instruments like cryptocurrencies.”
Through these words, we can glimpse at the inner thoughts of an informed believer in a global future. Shervin Pishevar understands that there is a continuous reckoning of old systems with new tools brought on by technological achievement. These reaches have extended beyond communication and toward a shared, non-regional economy. Pishevar says “All institutions, government + financial, are facing a reckoning of irrelevance when it comes to what is a once in 1000 year shift coming.” He’s alluding to a larger pattern in human history, that call for reconfiguration of controlling powers. The Tweet immediately following reads,
“That shift has to do with a revolution in stateless digital currencies unleashed across the globe over next coupl[e] decades.”
His words pry at some of the pressing concerns of late. Pishevar weaves in talk of the implications of our actions against immigration. He says in one Tweet,
“But while we build walls physical and culture to keep out immigrant talent that talent doesn’t need to come here anymore.”
This statement resonates with the letter he wrote in 2008, when he himself travelled to seek out the talent for his company. Pointing still to the stifling of American innovation in some sectors, Shervin Pishevar links to an article from SCMP News. The article caption reads “1,500 Chinese construction workers built this train station in just nine hours.” His own commentary on this news article states this is an example of “the speed of execution that now exists in China.” Further, Pishevar says, “Speed of execution across many sectors from other regions is startling. Very little of frictions that are becoming systemic fractures here.”
The narrative continues
“Meanwhile, our infrastructure is in tatters, decrypt and decaying. Our government and companies are trapped in short term thinking.” And, “Moonshot like SpaceX + Virgin Hyperloop One rise but they suffer derision until teams will it to reality. Exceptions to rule.”
This Tweet coincides with the day of launch of SpaceX’s Falcon Heavy on February 6th, 2018. Shervin Pishevar may have used Twitter, a medium normally reserved for quick one-offs, but he constructed a meaningful narrative. He warns us of our economic futures in the face of giants like Apple, the global rise of cryptocurrency, and our low-achieving short term thinking. Pishevar sees in futures and potentials, and we can certainly already see that the future he speaks of is unfolding.