2 ms·
It's almost entirely because of inflation. Persistent inflation raises the discount rate (10y treasury yield), and devalues all other assets. Why would you buy
by adam_arthur 4y ago
It's almost entirely because of inflation. Persistent inflation raises the discount rate (10y treasury yield), and devalues all other assets.
Why would you buy a 100x PE company (1% yield) when you can get 3% guaranteed today? Even growing at double digit rates, how many years just to match that return? Except many tech companies were 100x PS not even 100x PE. DDOG and NET are two examples.
If the 10y runs to even 3.5-4%, and stays there, we're likely to see a 40-50% haircut in markets.