From Jeff Sommer’s “The Market Partied Like It Was 1932” in Sunday’s NYTimes:
Thanks in large part to the Federal Reserve’s intervention in the markets since late March, risk-taking abounds, sometimes in willful disregard of unappealing stock valuations. As I’ve pointed out, the market has often operated as though the current problems of the world, and of public companies, were irrelevant.
Even when stocks make sense in the pandemic, exuberant traders have been pushing prices to stratospheric levels. Zoom Video has become a household name because of the coronavirus, but its earnings are small. Does it really merit a price-to-earnings ratio of 1,421.4 — Apple’s is 28.3 — and a gain this year of more than 270 percent?
My take: No, but more power to them.