History of trends in financial markets

Let's talk about investments and start with such a thing as trends in financial markets.

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#ВЕНЧУР

In 2014, the trend was trust management strategies. Each broker had 7-8 strategies for every taste and color. Why trust management?
Firstly, digitalization. All platforms were too complex and inconvenient.
Secondly, the investor himself had little understanding of everything, it was something so transcendental.
However, financial literacy is growing, and investors are beginning to come to the point where they want to press the buttons themselves and make their own decisions. Independent trading is becoming a trend. Now the investor is his own portfolio manager, and each manager wants greater profitability.

In 2019 and 2020, the main trend for many investors is IPO. Anyone who opened an account in those years, bought American securities and participated in the IPO themselves earned more than 100%.

In 2022, the trend changes towards longer-term money. Instruments such as pre-IPOs are coming to the market. However, with the stock market falling in 2022, this trend is coming to an end. This happens because when there is a lot of cheap money on the market, all companies/projects try to sell to the investor as expensive as possible. And how do they do this? They simply increase their own valuation using a higher multiplier.

There is a company that was valued at $50 million. The valuation was based on the following formula: EBITDA (earnings before interest tax, depreciation and amortization) * multiplier 35 (annual revenue 1.4 million dollars). However, time passes and the shareholder realizes that the valuation is small. He takes and revalues the company to $100 million.
Do you know how he did that? I just changed the multiplier from 35 to 70. Is it possible to do this? Yes, now he only needs to find an investor at this valuation, and then the company’s value will become fair.