If we look at the largest US companies by market capitalization, we can see that many of them don’t have extensive histories of profitability. In fact, some of them only became consistently profitable less than a decade ago—or in a few cases, even less than a year ago.
This trend of newer companies leapfrogging older ones has to some degree become the new normal. It even has some questioning whether the future of asset management should look more like venture capitalism, where the focus is on a company’s future earning potential—not backward-looking profitability analysis.
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