Today’s US inflation data will be interesting; hopefully we’ll see signs of a peak 
The oil markets will let you know
USA CPI 9.1
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I wonder if retailers having sales to get rid of stockpiles is the reason.
That would be deflationary. It’s housing and oil
Not sure why this is such a surprise to the forecasters. We’re seeing signs of slowdown in certain areas, some commodities, shipping and €zone but this is last few weeks. Data won’t feed through to headline in the US for another month and even then will need to be sustained.
Must be drinking a few too many Pina Coladas in the summer heat…
Because we’ve had free money, most top level positions are full of decadent idiots who are going to get a geopolitical punch in the face.
Other news: Bank runs in China still going strong, actual CCP / Bank protests, CCP sends in goons to beat up and disperse mums, dad’s and kids. Others have had covid passes turned red to stop bank runs and protests.
That’s on top of the coming housing collapse.
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Today my ISA was in profit for the first time since I started it in April, it lasted a few hours lol. Currently 0.7% down but was 10% down last week.
Maybe they will drop again soon, UK and US interest rates are expected to go up over the next couple of weeks and some think a recession is coming.
I wish I had a crystal ball lol.
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I think (in relative terms) we’ve been spoiled for the last week or so. Huge gains! Today was inevitable though unfortunately. One squeaky bum earnings - Snap - not to mention inflation - and the whole world goes to 
!! Understandable but still 
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@NeilB I came across a comment piece Inflation will burst this tech bubble – and good riddance to its New Age cranks, published a month ago, that is worth reading as a follow on to the discussion related to Google Alphabet - GOOG - Share Chat - #145 by NeilB and Alphabet - GOOG - Share Chat - #146 by bitflip. Read especially the last four paragraphs starting
But the greatest fear of all for his disciples is inflation.
In a nutshell, cheap money has lead us to where we are and then …
“It’s pure mathematics,” Jainz explains. “Rising interest rates reduce the long-term value of high-growth companies when you’re projecting out twenty or thirty years”.
“It’s pure mathematics,” Jainz explains. “Rising interest rates reduce the long-term value of high-growth companies when you’re projecting out twenty or thirty years”.
Not necessarily.
Higher cost of capital reduces the value of future cash flows. That’s the mathematics bit.
Rising interest rates are there to combat inflation. Inflation likely means higher future cash flows (assuming inflation rate is the same across everything, which of course it isn’t).
Once inflation comes down, interest rates come down. Cost of capital normalises and value of future cash flow normalises.
Short version: long term, it should even itself out in the wash?
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It does. You are forgetting the cost of borrowing and the cost of long term interest rates. You are forgetting the context of the discussion which is where money flows in the market now. There is nothing “not necessarily” about this. We are actually seeing it happen at this moment. But then it appears sometimes to me that one has to work in the financial markets to see this.
Notice that the quote and source discussion is about valuations of high growth tech companies and what is happening to them now. We have no idea how long inflation will play out (is it persistent? is it short term? Dunno)
If you argue that you don’t know how inflation will play out then you also don’t know how interest rates will play out.
My point being, to properly reassess the fair value of a business you need to consider revisions to both cost of capital and future cash flows. Looking at one but not the other will skew the result.
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There is a new geopolitical environment with a strong dollar and if folks think normalisation is back where we where on rates I think yer in for a rude awakening.
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Sure there is a correlation but we don’t know the dynamics of this.
You are completely right that you could (and many do) assess or define the fair value of a business like that. But that is not really what the article is about. Your assumption (it appears) is that things revert to some lovely “normal” status … and the last several years and in particular the last couple of years (to me anyway) in particular are not “normal”. If one is going to pick stocks at the moment they ought to be very cautious of past peaks (and trough’s) … one or two people on these forums think something is cheap because it is below a recent high.
My assumption is that it could. There are many factors at play, most of which aren’t known with any degree of certainty. Which makes ‘pure mathematics’ an oversimplification.
As it assuming things are cheap because they’re down from a recent high. You’re right, lots of people do that.
IMO there’s a lot of rubbish out there which is still overpriced, but there is also a lot which looks cheap following the growth stock hammering.
Huge earnings day today (and the remainder of the week). Post US market seems to be positive thus far overall, despite (I think) the big fellas’ MSFT, V and GOOGL missing targets by a bit. Unilever was ok too. Whatever, I’m still going to hide behind my sofa for the next 12 months!
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They haven’t mate? Well not on my account anyway.
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Some chap called Milton someone or other /s
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I’m noticing in my portfolios, nothing is falling, or at least not like it did, most have plateaued, some even gaining
is it too soon to call, this is the bottom of things
the only way is up for the rest of the year
