There are signs investors are ready to give the dice a rest. Son’s newfound appreciation for profits appears to be more widely shared. Goldman Sachs Group Inc. CEO David Solomon told Bloomberg TV recently that, “there’s got to be a clear and articulated path to profitability” and that he thinks “there’s a little more market discipline coming into play.”
Seeing red tends to sober up investors. Glamour stocks are down 9.1% over the last year through September, even as the S&P 500 has returned 4.3%. And that bottom quartile of venture funds posted a negative IRR of 9.2% in 2017, the most recent year for which numbers are available.
At some point, the growth-at-all-cost fad will end, if it hasn’t already. But it never disappears, which is why everyone could use a reminder that profits, governance and price never go out of style.
Nir Kaissar is a Bloomberg Opinion columnist covering the markets. He is the founder of Unison Advisors, an asset management firm. He has worked as a lawyer at Sullivan & Cromwell and a consultant at Ernst & Young.