Charles Hugh Smith

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Are Tech Giants' New Buildings Signs of the Top?

When banks build new gleaming headquarters, that generally marks the top of the bank’s fortunes.

There appears to be some sort of hubris in constructing a monumental new headquarters that shouts “we’re rich beyond all conception” that angers the stock market gods.

For this reason, we should ponder the glamorous new headquarters Facebook just completed and Apple’s “spaceship” campus that is under construction.

Google’s plans for an ultra-modernist headquarters were recently tabled by the city of Mountain View, but the grandiose plans themselves may count as hubris to the stock market gods

Here is an interior view of Facebook’s new digs: note that it’s literally dripping with arty decor:

FB-HQ1

Here is Facebook’s stock chart:

FB7-20-15

Here is a drone-cam view of Apple’s spaceship campus under construction:

apple-HQ1

Here is Apple’s stock chart:

AAPL7-20-15

An architectural rendering of Google’s proposed complex that was turned down by Mountain View CA:

GOOG-HQ1

Here is Google’s stock chart:

GOOG7-20-15

If pouring billions of dollars into outrageous “look at me” buildings isn’t tempting the gods, what is it?

At the top, it is inconceivable that these buildings could be monuments not just to hubris but to excessive confidence in endless growth of revenues, profits and valuations.

The idea that these magnificent buildings might some day be half-empty does not occur to one in a thousand people at this juncture.

This is not to wish these tech giants ill, it is simply to note that projections based on permanently parabolic growth have a long history of crashing back to Earth when the true believers least expect it.

Regards,

Charles Hugh Smith
for The Daily Reckoning

P.S. Ever since my first summer job decades ago, I’ve been chasing financial security. Not win-the-lottery, Bill Gates riches (although it would be nice!), but simply a feeling of financial control. I want my financial worries to if not disappear at least be manageable and comprehensible.

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The Daily Reckoning