4 ms·

Because we're in a tech bubble. These valuations are absurd.

• drawkbox 6y ago
  That and low interest rates and looking for a place to put money, plus the Warren Buffet multiplier. There are only 3600~ companies on the US markets [1], half of what was there in the 90s. There aren't many places to put lots of money. The rise of private equity (PE) really has taken lots of the growth out of the public markets but since there are so few, and low interest rates, people are looking for returns. Lots of it is also pump and dump schemes loading up stocks and then short and distort. The problem is the growth is tapped on public markets now, PE drains it before it gets there, so more volatility games are being played. Couple that with less spending purchasing power in the lower/middle and that adds to the games as investment in new consumer focused companies isn't working as well when purchasing power is drained, M2V has hit a precipice [2] [1] https://www.wsj.com/articles/where-have-all-the-public-companies-gone-1510869125 https://www.wsj.com/articles/where-have-all-the-public-compa... [2] https://fred.stlouisfed.org/series/M2V https://fred.stlouisfed.org/series/M2V
• vaccinator 6y ago
  With all the money the government is giving around, it might be part inflation too.