Part 5/7:
Historical Examples and Modern Case Studies
Two historical case studies highlighted during the discussion were Amazon and Salesforce. Both companies initially faced skepticism due to their high P/E ratios, yet they thrived due to their commitment to reinvestment and long-term growth strategies. Amazon, for instance, operated with a P/E in the hundreds for many years, focusing on expanding its market share and infrastructure, while still managing to enhance its revenue significantly.
Similarly, Salesforce, while operating at a loss on standard accounting metrics, demonstrated robust operating cash flows, indicating a business with a sound economic model despite its high P/E.