Why Stocks Corrected + Second Quarter Tech Earnings — ft. Mark Mahaney
Prof G Markets
00:00
Valuation Shields in Volatile Markets
Investing in stocks presents inherent risks, particularly when companies increase capital expenditures amid concerns of an economic recession, which can lead to a decrease in revenue. This dual threat—a rise in spending coupled with falling revenues—exacerbates the risk profile for high-multiple stocks. However, companies like Meta and Google, which trade at lower price-to-earnings ratios (18 to 20), offer a form of valuation protection against significant declines, unlike those trading at historically high multiples. Such market dislocations can present attractive buying opportunities for savvy investors, despite overall market fears.
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