David Toms
speaker
276 appearances
2 recordings
1 series
first heard Apr 2022
last heard Oct 2022
David Toms’s voice in public audio — every appearance, attributed to the second.
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It's because it actually continued to grow double digit.
So we've got much more profit than we thought we'd have and we've got more growth.
So I think the structural side of things, that 2% assumption is still wrong.
So whether the market
sort of whether you get a rapid correction of people saying actually twenty, twenty five times is the right level to price things at, which implies you're a a higher but still not ludicrous percentage growth at the end, or whether it's just a more gradual realisation over years, I'm not sure.
But I'd say from a from a structural perspective, yes, we're undervalued.
There's a a beautiful expression from Microsoft recently, I think it was from Satya Nadella himself, which was that
Tech is deflationary in an inflationary world.
We are providing the tools to help people keep to manage their costs to avoid some of the aspects of inflation that otherwise cause pain.
Just like 50 years ago, buying machinery and automating your factories was deflationary in an inflationary environment.
Software is that from the modern world.
I think the biggest thing we've seen is an unwinding, I suppose, of of the growth trade, if I can call it that, which is that if you go back to just pre-pandemic and then certainly the first year of the pandemic world, 2020 to mid 2021.
Essentially, investors were very, very excited by growth in any form.
I think because it became so rare for a period of time because most companies were struggling so much.
And there were a number of other factors potentially at play as well, around stimulus checks and the retail market getting involved and so on.
But but broadly what we saw for that period was it didn't really matter what the economics of your business were, it just mattered how fast it was growing.
And what that drove was a sort of a massive valuation expansion in all kinds of stocks, led more by the growth and the excitement around their story than necessarily about their underlying economics.
And basically we've seen a reversal of that.
It it probably started sometime around spring last year, but there's been an acceleration of that in the latter part of last year and the first quarter of
Yes, exactly.
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