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In reality when debt/funding is exceptionally cheap, conditions exist for these sort of companies to be fine. Or to put it another way, when there's few options
by carlivar 5y ago
In reality when debt/funding is exceptionally cheap, conditions exist for these sort of companies to be fine. Or to put it another way, when there's few options to park money and expect a reasonable return, risk threshold for unprofitable companies becomes lower.
So the market isn't really irrational. You might argue our interest rates and monetary policies are irrational. I would agree with you.
- pclmulqdq 5y agoAll asset valuations have a numerator and a denominator. I think people sometimes forget that - if dollars are cheap, stocks with 100x multiples aren't that expensive. There is an inflation assumption baked into that price, but it seems to be coming true.