Mark Cuban, the outspoken billionaire entrepreneur, has outlined his belief that the market, post-coronavirus crash, is probably overvalued.
Speaking to CNBC the American businessman stated: “I think it’s almost impossible to predict where consumer and corporate demand is going to come from. And because of that, it’s hard to create a valuation for businesses.”
Despite one of the largest economic shocks in modern American history, with unemployment swelling to levels not seen since the Great Depression, all three major US indices have recovered rapidly in recent months. Almost unprecedented levels of intervention from the Federal Reserve and a record-breaking stimulus package passed by Congress have fuelled much of this recovery.
Cuban’s concern is by no means newfound. Last month he admitted he was “surprised” at the scale of the market recovery, stating: “I think people are naturally optimistic right now in terms of the market. I just don’t think they are really factoring in what we are going to see on the other side.”
In recent weeks, a number of leading investors have more openly voiced their concern as to whether this surge actually has legs, most notably Stanley Druckenmiller and David Tepper.
Despite his wariness and opinion that “business has been fundamentally changed” by the Covid-19 crisis, two of Cuban’s biggest bets have thus far paid off. In the past three months, Netflix (NFLX) shares have gained 15.88 per cent, while Amazon (AMZN) stands up 11.9 per cent.