"I see daily reminders that valuation is increasingly out of favor," Skip Tague, the managing member of RBI Capital writes in his third-quarter letter to investors. "Fundamental momentum seems to matter more than valuation, particularly in the short-term. Stocks with good news go up, regardless of their valuation. The adage of 'buy on rumor, sell on news' has now become 'buy on rumor, buy on news,'" he goes on to say before noting that in a recent Wall Street Journal article, one portfolio manager was quoted as saying "I don’t care about multiples," when asked about the valuation of tech stocks.
Q3 hedge fund letters, conference, scoops etc
This momentum driven environment reminds the founder of RBI, which is one of the last hedge funds in the world with an overall net short portfolio, of the 1990s tech bubble when investment managers took a similar approach to valuing growth stocks (i.e., they didn't bother).
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