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What's in a Multiple?
A company's valuation is pricing in a mix of three things: growth forecasts, risk and business quality. If you see a stock that's been really volatile over the last year, that's going to get a lot lower multiple than a stock that has been stable. And so I think that it's in the growth forecast that you really see that valuation mismatch in times of crisis. The biggest mistake they're making is they're really over-valuing safety in the crisis,.