Download Memo as PDF The Rise of the Unprofitables and Market Hyperopia? Once upon a time there was great concern about “market myopia” – the tendency of investors to be strongly focused on the short term at the expense of long-term benefits. Along with many CEOs, Nobel Prize winners Richard Thaler and Daniel Kahneman warned
Today the Cornell Capital Group is introducing a new index, the CCG Unprofitable Index. But before we get there a little history. A decade or so ago many corporate CEO’s along with Nobel Prize winners Richard Thaler and Daniel Kahneman were wringing their hands about what they called market myopia. What this meant was that
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By Bradford Cornell, Rob Arnott, Lillian Wu If a capitalist had been present at Kitty Hawk back in the early 1900s, he should’ve shot down Orville Wright; he would have saved his progeny money. —Warren Buffett Our objective is always to build big companies—if you don’t attack a big market, you’re highly unlikely to build a big company. —Don Valentine, Founder of Sequoia Big markets have a special allure for investors. They offer the promise of another Apple, Google, or Microsoft. But big markets also bring with them the threat of what Cornell and Damodaran (2020) call “the big market delusion.” Big market delusions generally begin with innovation or disruption that opens a new market, such as