Abigail with attitude: Inflation or deflation?
The question I would want to know, were I a Euromoney reader, is: what is really going on out there? Is the world healing? Has it healed? Or indeed, has the world healed so completely that we are now about to suffer another bout of illness?
I have been thinking hard about these and related questions and talking to as many experts as I can find. As I have mentioned before, valuation discrepancies abound. The word ‘bubble’ has re-entered the pundit’s lexicon. Indeed in mid-January the Financial Times ran a large article under the banner headline: ‘Valuations. Is this nuts? Investors appear to have taken leave of their senses, pumping cash into projects regardless of profitability.’ The article talked about the gravity-defying prices being paid for companies such as Twitter, Square, Ocado and Asos.
Haven’t we seen this movie before? In 2000, weren’t we being told that this time is different: jettison traditional pricing ratios in favour of ‘eyeball’ metrics? In 2007, weren’t we assured that US house prices could never go down? Thus, a foolproof way to make money was to buy apartments off-plan in Miami or Las Vegas and flip them to the next sucker.