Is there a “new economy” that justifies higher price/earnings ratios?
I think sometimes people confuse sections of a business cycle with a new paradigm. We are in a cycle, probably at the tail-end of a bull market. To take that piece of the cycle and turn it into a standard for a new society is dangerous. Allen & Co. makes a point of employing no security analysts. Is that because you think they inflate stock values? Wall Street analysts are usually fairly weak historians and very poor prognosticators. They don’t buy what they’re recommending, so they immediately have a conflict of interest with their customers. Analysts today are used primarily to get investment banking business for the big firms. So if you’re using the analyst to get the investment banking business, how trustworthy is his opinion going to be on the other side when he’s selling the stock to some poor jerk? After the next sustained market break, analysts will be laid off wholesale. Unlike other investment bankers, you never charge a set fee when you help put together entertainment megade
