CALL CAPITALIZATION

With equities outperforming despite tariffs, wars, and inflation, a rethink is in order. Maybe stretched tech P/E ratios represent an acquisition premium layered onto a growth premium. Perhaps these firms are profoundly valuable because they will buy/copy/partner with competitors (see SpaceX’s recent purchase of Cursor). Investors are buying a claim (call option) on future innovation by start-ups that will necessarily be brought into the orbit of the biggest tech firms.