This time isn’t different
Aug 11, 2019
As a vegetarian I was naturally thrilled to see the successful float of Beyond Meat (NASDAQ: BYND).
That’s great, but anyone can see that valuing a company with such tiny revenues at almost US$10 billion is also beyond ridiculous.
I don’t mind using Uber either, for that matter, but imagine ‘investing’ in a company (NYSE: UBER) that can lose more than $5 billion in a single quarter a decade after being founded, let alone one with a market cap of US$67 billion!
Of course, this exuberance won’t be sustained because it never is.
And it’s not just a handful of tech companies we’re talking about here, sky high valuations have been extrapolated across entire markets.
Here’s the Shiller PE ratio, levitating at a level that’s never previously been sustained:
Granted, that’s just one measure – and a blunt one at that – but at the individual company level this is an overvalued market writ large:
We never know when the stock market is going to turn, but this is where we currently are, with all indicators pointing to an expensive market.
It’s a good time to be cautious and to keep some dry powder, as I discuss in this short video here
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