Macquarie strategist Viktor Shvets has a theory about the speed with which sharemarket winners and losers can emerge in a world where abundant capital has become fused with incredible technology.
“Today, it is far easier to build large and profitable companies than it used to be at any time in history: what took decades can now be done in quarters or years,” he says. “But, this implies that it is equally easy to destroy large companies with all winnings going to winners. An equity re-rating usually springs from just one or two ‘right’ business decisions, while one ‘wrong’ turn could lead to massive derating.”
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