Thread by @CapitalSapling

A successful consumer tech company should always be valued significantly higher than a normal consumer company.
Opportunity size is large for both but the digital distribution of the tech company services allows it traverse the opp landscape faster than a normal consumer company.

Since capex is not a challenge in setting up a tech business, therefore a tech company has to create alternate barriers, thus the need to drive business velocity as network effect is true barrier to entry.
To get to that scale, tech companies have to sacrifice near term eps.

If public market doesnot agree with this, its the markets' loss, these companies will either stay private or raise equity from Nasdaq.

So in true tech if the public market participants want the alpha, they have to devise alternate methods to assess a company and its valuations.

Now when eps is not available as an easy metric to value companies, it takes away the analyst community's favorite valuation tools like pe pb.
Thus the need to look at companies through a fundamental lens, something we have talked about extensively at Sapling.

Alternative tools such as assessing the company's products and services' ability to drive dopamine rush in the minds of the consumers or reduce friction from the lives of its patrons are tools, that unfortunately cannot be mapped on a metric scale.

While the breadth of research is immense amongst the analyst community, unfortunately it comes at the cost of true depth.
The need to have a superficial opinion on every company eats away at the time that could have been otherwise spent on scrutinizing moats in depth.

And this constant flurry of clutching at straws and coming up with imaginary pseudo red flags is more harmful than constructive.
When one doesn't understand, one can respectfully leave it rather than compulsively coming up with an opinion to impress headless followers.