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Should you ignore valuation because the foundations will be so strong in the future that it doesn't matter what the price is?
A stock trading at a multiple of 10 times or more its revenue could still provide a profitable investment.
The likelihood of companies trading at more than 10 times sales is much more significant, though.
The long-term real returns to a portfolio of companies trading at 10x sales or higher against the general stock market are shown in this GMO exhibit.
(Click on image to enlarge)
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