Dion Rabouin
speaker
287 appearances
5 recordings
1 series
first heard Sep 2022
last heard Dec 2023
Dion Rabouin’s voice in public audio — every appearance, attributed to the second.
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Appearances
If you're going to grow, you need to sell more stuff.
You need to earn more revenue.
And these companies were doing it and creating their profits largely by making cuts.
So we'll see if that can continue.
Why is that significant to somebody with a stock portfolio or a 401k?
Because the stock market is all about growth.
For stock prices to continue to rise, these companies need to continue to grow.
And as we're in this new environment where interest rates are higher, where it costs more money to borrow things, companies can't just buy back their stocks or use some of these tricks that they've used in recent years to move the stock price higher.
They really do have to generate more sales, create more revenue, and do things like that to juice the bottom line.
It's going to be interesting as we move forward into 2024 whether companies can generate organic revenue growth and really grow the old-fashioned way.
The value of tech stocks and therefore the stock price is all about what these companies can do in the future.
A lot of them don't make a lot of money now.
And we're not talking about the big companies like Meta, Amazon, but some of those smaller tech names.
The growth there, the stock price there is all about what investors expect them to do in the future.
And if it costs more money to grow because you have to borrow money and the cost of borrowing that money is much higher, that really brings down or rains in the stock price.
So what investors are looking for when it comes to the Fed is when the Fed lowers rates, it's cheaper for companies to borrow money.
And that's especially important for these big tech companies that, A, borrow a lot of money and B, are expected to grow a lot in the future.
If you're planning to grow and you can borrow money cheaply, there's a lot more runway for you to grow and for your stock price to rise.
But if it's going to cost a lot of money for you to borrow and that's going to keep you from doing other things because you have to put that money towards servicing debt, paying back money you've borrowed.
Well, that's going to reduce the amount that investors can expect you to grow as a company.
Showing 41–60 of 287 · page 3 of 15
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