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The Macro Delusion and Pricing Bubbles: The Good, Bad and the Ugly!
Description
In this webcast, I look at how big markets + over confidence can create over pricing, and why it is a natural part of markets. I use the social media companies as my sample, with the big online advertising market as the allure, to show how investors over price companies. However, I argue that this over pricing is a natural part of markets and that without these periodic spurts of over optimism, markets will become boring and economies stagnant.
Blog Post: bit.ly/1JBGHVx
Presentation: http://www.stern.nyu.edu/~adamodar/pdfiles/blog/macrodelusion.pdf
Spreadsheet to compute imputed revenues:
http://www.stern.nyu.edu/~adamodar/pc/blog/BreakevenRevenueCalculator.xlsx
Folder with imputed revenue computations for social media firms:
http://www.stern.nyu.edu/~adamodar/pc/blog/BreakevenAug2015
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