“Davidson” submits:
DOCU 30x Revenue, SHOP 60x Revenue touted by CNBC. Even though they qualify these companies as ‘rich’, CNBC touts them as impressive deal makers.
The issue is that we are seeing foreign money drive these issues higher. Old money tends towards Value Investing, but new money has always been Momentum. This is part of the Modern Portfolio Theory boomerang effect converting Developed market capital into Emerging Market Equity and Fixed Income. The newly wealthy EmgMkt investors turn around and ship capital to safest/highest return market which is the US. First they selected US Treasuries and other Sovereign Debt creating negative rates in countries without enough 10yr debt to absorb the flood. Then, it ran into real estate which showed up a historical low REIT yields. Now, it is driving the Mega-Caps.
This is foreign capital with a similar mindset to what was behind the Japan Inc market of the 1980s. They are buying the themes and with thinking reinforced by price-trends.
We are still in the early stages of this phenomena.