Understanding These 2 Metrics Will Make You a Better Growth Investor
Market pundits are comparing the recent throttling of technology stocks to the Dot.com bubble of the early 2000s. With the tech-heavy Nasdaq Composite down nearly 30% year to date, its easy to see why. But there's a key difference between the two crashes. At the turn of the millennium, many internet companies saw their stock prices skyrocket purely on speculation.
The majority of these companies lacked any meaningful revenue to show their business models could be substantiated. In other words, they didn't really have business models -- just plans (see Pets.com). The CEO of UBS, Ralph Hamers, said this at the recent World Economic Forum:
It is not like 20 years ago. We had some models that were just models on paper and not real. In the last 20 years, we have been able to show that there are real changes happening in retail businesses, in financial businesses etc., and that trend is not going to stop because of what we see currently.
Source Fool.com
