The emperor has no clothes:
When it comes to financial markets, the emperor has no clothes.
We’ve grown accustomed to spectacular valuations for companies both in public and in private markets with questionable returns and long term business model.
Every time the tide of liquidity comes in due to a debt crisis or inflation, investors briefly return to sobriety and value these companies closer to what they are worth.
This is followed by an inevitable flood of liquidity from central banks to prop up markets and the hysteria is reinstated.
This cycle is going to continue and accelerate as inflation becomes a greater concern due to public and private debt.
When the bubble bursts once and for all, there will be no recompense.
So when betting on these types of companies — you know what they are — one should avoid trying to make up fantasies about their long term merit and instead consider how many more times the government can flood the market with liquidity before it will burst at the seams.