People who invest for risk don't care whether your valuation is high or low, whether your actual profitability justifies it, or any of that. They care about one thing only: if I buy at this price, will someone be willing to pay me more for it?
Consumption expectations are deteriorating, investment outlooks are weakening, everyone’s busy paying down debt and cutting unnecessary spending, leading to poor cash flow and very little willingness to spend.
Demand for essentials won’t change much, but many non-essential expenses will be cut back.
In this environment, essential businesses that generate cash flow are good businesses. In upswings, only those that can leverage debt to boost profits are truly great ventures.