Re:How to get rich in tech
by knughit on Thursday December 24, 2015 @05:12PM
(#10789731)
Since economics shows that if everyone believes in 7% return , and capital is so efficient to move as it is now with digital systems, that grown would be already priced in. Hence the absurd 50-100x P/E ratios we see. It is unsustainable.
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It's only unsustainable if the underlying assets don't allow for 7% return in the long run. It's possible capital is scarce relative to the opportunities for investment such that 7% real returns are the norm. In that case, it doesn't matter if everyone believes in the 7% rate, there will be no crash.