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Originally Posted by Jcrew
2.) As you mention, more expensive financing of their cash burn.
But as I also mentioned, it seems like that would be offset by the fact that these growth stocks already have a bunch of debt, and that debt would diminish in an inflation scenario. And if you take something like TSLA, at least for the bulls who hold the stock, they don't think they'll have to raise anymore. I'm not seeing companies with high debt who aren't likely to need to raise doing well while companies that
are likely to need to raise sell off—it just looks like everything high-beta is selling off. Maybe I'm wrong about that though; that's just my impression.
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3.) Right now, no place to invest safely with negative real rates. Once rates are high enough, fixed becomes are a viable alternative to preserve wealth.
I assume you mean
without negative real rates. And while I agree with this sentiment, it doesn't describe what's happening. The bond yields aren't rising because of high demand from people shifting toward fixed income; it's the opposite—bond yields are rising because nobody wants them. And throwing an extra twenty basis points on the repulsively low 1.25% yield, when fears of inflation are rampant, doesn't seem like it would entice anyone.
4.) Higher rates historically indicated the economy coming back, so a rotation from tech promises to the "real" economy (smallcaps + consumption).[/QUOTE]
The economy coming back seems as much of a bull argument for the froth stocks (TSLA, SKLZ, CCIV) as anything else. People will just have more money to speculate with and to meet the chimerical revenue projections needed for their valuations.