RE:Fiar ValueThe year 2000 Sun Micro Systems share price reaches $258. 2001/2 it crashed, eventually bought out by Oracle at $9.50 a share or just over $5 Billion 7 years later.
Fast forward 2023, similar high valuations then crashes. Investors not as shell shocked as the year 2001 but certainly pouring over companies financials. The best ones will get bought up by the large ones that survived and increase their market share.
Point is, market valuations don't matter to much today, it's what the company can bring to the table, does the companies business lock in with another to further growth. Can that companies pipeline of orders continue and is it spread out enough over many segments of the market that the company might pose a threat to its competitors. Also spread out enough that if one business partner turns down their quote they have enough others to fill that gap for revenue going forward.
I think the last sentence is probably what most of us are waiting for. We invested in a firm that we hope will have multiple contracts through/with various sectors. And not reliant on one or two.
Its better for a bank to have 100 x 1 million loans than 2 of $50 million each.
Spread the risk.
I've bought, and I'll wait to see what happens going forward throughout this year.