Why WeWork and tech stocks like Tesla, Netflix point to credit crisis - Business Insider

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'An impending corporate-debt crisis': A fund manager destroying 98% of his peers explains why Tesla, Netflix, and other tech darlings are in the same boat as WeWork

still had one of WeWork's flaws: they were popular firms that relied on "the kindness of capital markets" for their valuations.

He was not referring to the charitable leanings of individuals. Rather, he was describing investors who seemingly turned a blind eye to companies that fueled their growth with cheaply financed debt. "The biggest concern I probably have is that all of these low rates have led to a debt binge, loaded up asset prices everywhere — in private equities, public equities, venture capital — everywhere, Yacktman said. "And so you could have an impendingCredit investors took note of this crisis risk earlier in 2019 when recession fears reached fever pitch.

Reflecting on his portfolio's performance in 2019, Yacktman said: "The one that surprised us — more than beaten our expectations by far — is He added, "I still think that it's a great long-term buy. We've owned it since 2012. In the last five years, it's compounded at 40% annualized. They're the gold standard for international indices. "

 

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Beating the market in a bad year is worth more than in a good year. So 2020 expected to be a bad year. If you can rewrite debt the corporations can outgrow their liabilities. If low interest rates disappear the bloodbath begins. Who hasn't made 100% on certain derivatives trades.

Corporate debt and personal debt are at all time highs. Only a matter of time before the bubble pops.

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