In his recent interview on the Delphi Economic Forum, Prem Watsa discussed the two-tier economy and high-tech valuations. Here’s an excerpt from the interview:
Q2 2021 hedge fund letters, conferences and more
So the two-tier market is very simply Alexis that high-tech… anything that’s high-tech for example Zoom Technologies were selling at $130 Billion. It’s still selling… it’s come down but it’s still selling at $80 billion. It’s got revenues of $4 Billion. Revenues of 4, values of of $80 Billion.
It’s only in the stock market that you can get these unbelievable valuations.
So the whole technology is very expensive and everything else which is sensitive to the economy got crushed last year and it’s come back significantly.
But in our minds that area of the markets… we’ve got a long ways to go, and it’s a pretty significant part of the S&P500 because the tech stocks occupy maybe 35% of the index now and everything else hasn’t gone up as much.
And as the economy picks up the earnings will pick up and these companies are still selling, even now selling at relatively inexpensive prices.
You can watch the entire interview here:
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Article by The Acquirer’s Multiple
