Key insights
- The author expresses concern about market irrationality, citing examples like low valuations for enterprise software (SAP) despite stable fundamentals and a surge in Avis stock price without clear justification. They highlight the disconnect between market performance and downward revisions in US GDP growth, questioning the market's overall logic and raising doubts about its current state.
For anyone who's been around for a while, how irrational would you say this market is? Relative to previous periods of peak market irrationality.
Right now we have enterprise software stocks like SAP trading at record low valuations despite no change in fundamentals. Meanwhile you have a rental car company like Avis trading up 300% in a month for no reason whatsoever.
And the market is pumping depite US GDP growth being revised down from 4.4% to 0.5% (vs 2.8% initially expected).
Idk maybe I'm having a crisis of faith in this market. But how do you make this make sense?