When valuations are high, companies IPO, founders cash out and hopefully go on s...

		webinvest on March 22, 2023 \| parent \| context \| favorite \| on: Fed hikes rates by 0.25 point despite recent turmo... When valuations are high, companies IPO, founders cash out and hopefully go on start new companies. People on the street buy companies for 3x their annual earnings but the stock market regularly buys companies for 8x, 20x, even 80x their annual earnings. This is expressed in each stock’s P/E ratio.