What Is To Admire About This Crop of Technology CEOs?
I see so much mediocrity amongst the share buyback-happy Technology CEO community. The Fed has done more to boost Market Values and PE multiples than most every management initiative. The Fed’s lowering rates, its enormous QE program of 2020-2022 and the bailout culture it has created has caused investors to become desensitized to risk – to market risk, to credit risk, to geopolitical risk – you name it.
When the Treasury market eventually says “Stop, you may not pass go, you may not collect $2 Trillion Dollars”, it will be abrupt, it will be painful, it will be shocking and the Fed will not be able to do anything about it. Nor will fiscal policy. Every week that the fiscal side of the house continues to give away the Treasury to the people (i.e. run deficits to support entitlement programs), we pull Treasury’s eventual day of reckoning forward.
I doubt there are more than a couple dozen Technology CEOs that will be capable of navigating those waters when that day happens sometime in the next 5-10 years. Certainly not CEOs that do not value balance sheet cash nor cash flow. The Treasury market will eat Sam Altman and OpenAI like a bug if it decides to rear its head before OpenAI builds a fortress Balance Sheet. Ditto for every other cocky company led by a shady CEO with a shit-eating grin.