Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

Zoom and Delusion

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In an article published in the Financial Analyst Journal, Aswath Damodaran and I describe and analyze what we call “The Big Market Delusion.”

As we describe in that article, the peril of a big market, especially in its early stages, is that the entrepreneurs it attracts and the investors who provide funding are often so enthused about their prospects for dramatic growth, that they ignore fundamentals and price their companies with unrealistic expectations about the future.  Furthermore, we note that when the big market delusion is in force, entrepreneurs, managers, and investors generally downplay existing competition, thus failing to factor in the reality that growth will have to be shared with both existing and potential new entrants.  We also observed that the big market space tends to quickly become overcrowded, as too many companies get founded, with each thinking the odds of success are better than they actually are.

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