QE drove investors to riskier returns and an inappropriate focus on growth companies that promise the future. This is a fundamental effect of low interest rates

QE drove investors to riskier returns and an inappropriate focus on growth companies that promise the future. This is a fundamental effect of low interest rates on valuation. Suppose you open a spreadsheet right now, discount 100 years of cash flows, and measure each cash flow as a % contribution to the sum (aka npv). You will find that at medium to higher rates years 0-20 make up the greatest percentage of the npv by far. But as you lower them, that relationship flips and cash flows for years 20 to 100 become the lion's share of the valuation. WeWork isn't the only 'ridiculous promise-the-future' company we saw over QE, just the first I could name off the top of my head. But through the lens I described above, all those weird 'how could investors be so stupid' situations make more sense because the valuation math was slanted to favor such situations.