RE:RE:The effect of rate hikes...Noshortsallowed wrote: I agree with all of this but I think it's important to think of WELLs fundamentals vs other comparables in this sector and opportunities for SaS revenue in healthcare and it's hard to argue that WELLs size and structural advantages in the sector relative to its peers of comparable size makes it a particularly good choice BECAUSE of the factors you outline because in an arena of compressed multiples the clear path to profitability becomes EVEN MORE IMPORTANT.
The reason that the yield curve is inverting is because higher rates are unsustainable long term, so the market thinks that increased rates will be temporary.
The argument that higher rates will lower multiples is market wide, not specific to WELL. Depending on your view, this could be a reason to leave the stock market. However, for those who stay and believe that long term it will still yields a higher return on capital, you just have to accept that for a time assets will be undervalued.
Also, even though interest rates increase, at some point they will be above inflation (supply will catch up eventually). At that point, expected returns will normalize and multiples will start increasing back.