Equities: hope springs eternal
Putting money into an equity gives the buyer hope for an outsized return, and this where the demand supply equilibrium of the stock dictates what price it should trade at.
We have seen crazy valuations in tech for 2021 only for them to lose 50-70% from their peak prices, but the FAANGs with their dominant market position ans their ability to generate strong free cashflows have propped up the tech indices.
2022 could be the year for value investing which was largely ignored in 2021, and investors could be rewarded with outsized returns if some of these consumer value stocks can pass on the inflationary costs to the customers. This is evident in industries which have seen very little capex over the last few years, such as the oil and gas sector and in commodities..
We have seen crazy valuations in tech for 2021 only for them to lose 50-70% from their peak prices, but the FAANGs with their dominant market position ans their ability to generate strong free cashflows have propped up the tech indices.
2022 could be the year for value investing which was largely ignored in 2021, and investors could be rewarded with outsized returns if some of these consumer value stocks can pass on the inflationary costs to the customers. This is evident in industries which have seen very little capex over the last few years, such as the oil and gas sector and in commodities..
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