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clock Created with Sketch. 17/12/21
13:49
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Originally posted by Wagger:
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well....I'd been working in financial markets for exactly a year when the crash of 1987 happened and everyone was long gold stocks that didn't actually produce anything for the most part...some just a series of pegs in the ground. Since then, we of course had the Japanese warrant fiasco, followed by many other corrections such as the Tech Wreck and, of course, GFC. The fact is, markets always overshoot on the upside and overshoot on the downside (fear and greed in action). What, IMO, is happening here is a rebasing of expectations around what has already been priced in around inflation and interest rate expectations, with the 'temporary' suddenly dropped from the inflation conversation and wages growth a concern...that inevitably leads to a quite significant derating of stocks such as 360, with revenue growth but no earnings. Someone commented to me the other day on this site that I shouldn't be looking at or for EBITDA with SaaS stocks (I responded that they would be very grateful for EBITDA when interest rates inevitably rise)...but when the chickens come home to roost (higher interest rates), your inputs for valuations change and this effects valuations of stocks with 'future earnings' quite significantly - its just maths! So, you have already seen some of the tech stocks on overseas markets be derated from double digit EV/Revenue multiples to single digits and the share prices have followed.
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Last edited by
Wagger :
17/12/21
(20min delay)