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Is this posted to imply things are overvalued and due for correction? If so there is one issue with that. It is more tax efficient to have lower earnings and d

Is this posted to imply things are overvalued and due for correction? If so there is one issue with that. It is more tax efficient to have lower earnings and disguise profit and reinvestment as R&D cost. Tech companies can do this covertly due to the jack of all trade Software Engineering (and friends) roles that could be BAU or RD work. When a metric becomes a target it ceases to become a good metric. But when an accounting metric causes you billions of dollars in tax, and you are mostly compensated in share price not earnings it becomes really skewed!

justin66 1y ago
> If so there is one issue with that. It is more tax efficient to have lower earnings and disguise profit and reinvestment as R&D cost. Stock prices are not just historically high relative to earnings (using CAPE or not), they're historically high relative to book value or sales. There might be a clever effort to not have earnings that are justified by share price, for tax reasons. Is there similarly a clever effort to not have sales that are justified by share price? > due for correction That's pretty hard to predict.