This misses the main driver. Valuations are no longer based on growth. The entire market has shifted to profitability over growth.
Companies with a stronger balance sheet coming out of the recession will be better positioned for the long term.
Seems that companies that gained their valuations through growth weren't sustainable in the long run.
And at a macro level, economic policy has largely deferred recessions since the 2008 housing bubble pop. That's not sustainable either. At some point a correction is going to happen.
The "social contagion" is companies betting that a correction is coming. Some made that bet early, and some are just now hopping on the train.
It's about survival for many companies. I bet we'll see fire sales, and acquisitions ramping up for the financially stronger companies.
Companies with a stronger balance sheet coming out of the recession will be better positioned for the long term.
Seems that companies that gained their valuations through growth weren't sustainable in the long run.
And at a macro level, economic policy has largely deferred recessions since the 2008 housing bubble pop. That's not sustainable either. At some point a correction is going to happen.
The "social contagion" is companies betting that a correction is coming. Some made that bet early, and some are just now hopping on the train.
It's about survival for many companies. I bet we'll see fire sales, and acquisitions ramping up for the financially stronger companies.