After The Dismal Ending Of US Stocks In April, Legendary Investor Bill Gurley Shared Some Of His Investment Wisdom On Twitter, And Amazon Founder Jeff Bezos Echoed, Saying That "the Market Will Teach People, And The Lesson May Be Painful." "An Entire Generation Of Entrepreneurs And Technology Investors Built Up Their Full View Of Valuation In The Second Half Of A 13 Year Amazing Bull Market," Gree Wrote In His Tweet.
For Many People, The Process Of 'unlearning' Can Be Painful, Surprising And Disturbing. I Expect Denial.
Some Ideas:
The Previous' Historical 'highs Are Completely Irrelevant. It's Not "cheap" Because It's Down 70%. Forget About Those Prices.
Valuation Multiples Have Always Been A Reference Index For Hackers. Hazardous Use. If You Insist, 10 Times Should Be Considered Amazing And The Upper Limit. It's Foolish To Surpass It.
You May Be Shocked To Learn That People Want To Evaluate Your Company Based On FCF (free Cash Flow) And Profitability. Facebook's Current Share Price Is 14 Times GAAP Earnings Per Share And Is Still Growing By 23%. What Do You Think Is The Profit Multiple? "
Bezos Forwarded Gree's Tweet And Commented:
"Bill Is Undoubtedly One Of The Smartest People I Know. His Words Are Always Worth Listening To.
Most People Have Seriously Underestimated The Significance Of This Bull Market.
Such Things Are Unstoppable... Until They Are Not.
Market Meeting education People, Lessons Can Be Painful. "