Inflation or Recession - Which Will the Fed Choose? } Jared Dillian
Forward Guidance
00:00
The Role of Interest Rates in Value Rotation
The catalyst for this rotation is interest rates, right? I mean, it's just math. You know, when you're looking at unprofitable tech, you basically have this company that doesn't really have any revenues or earnings. And then it's some terminal value out 50 years in the future, which means it's trading like a 50 year zero coupon bond. So it's very sensitive to interest rates. When interest rates start going up, these unprofitableTech names go down. Money goes from long duration to short duration.
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