Why Investors Increasingly Support Innovative but Unprofitable Companies
The investing world has changed a lot over the last decade, and 2020 is on track to be a year of particularly dramatic shifts. Many companies and investment strategies that once produced strong, dependable results are losing popularity, and investors are increasingly favoring innovative businesses with growth-dependent valuations over those with low earnings multiples and big dividends.
Tesla (NASDAQ: TSLA), for example, has never had a profitable year, but its stock has climbed roughly 269% thus far in 2020. Meanwhile, General Motors and Ford have each lost roughly 30% of their value despite posting much higher sales and earnings. It seems clear that the market is going gaga for growth -- here's why this big shift is occurring.
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Source Fool.com
