It’s not often you come across a chart that makes you immediately spit your peppermint tea out, copy and paste the link, and send it to all your finance banter WhatsApp groups (soon to be Signal, obvs).

So it is with great pleasure that we present to you the below from Jim Bianco of Bianco Research.

It shows a Goldman Sachs constructed index of non-profitable US listed firms, and it’s fair to say that after a few years of trundling sideways these companies’ share prices have done rather well since the Covid crash.

Ay caramba!

And if you’re wondering about the constituents, here’s a breakdown off Twitter, courtesy of account

Now there are two ways to frame this chart.

One is that the stock market has totally lost its marbles, and in a bid to make as much money in as little time as possible has decided to become one giant momentum trade which consumes ever more of itself as it feeds itself. Plausible sure, but a bit simplistic for our tastes.

The second take is that a lot of these companies -- such as Cloudflare, MongoDB and Roku -- are high growth, high-gross margin companies which should be re-investing all of their revenues back into the business to achieve scale. In fact, if they were making profits, it would be an admission that their end markets aren’t as big, or as lucrative, as once thought.

The reality is, both are true. Chinese electric car company Nio and hydrogen fuel cell business Plug Power have clearly become wild vehicles for speculative activity (they’re both in our EV Bubble spreadsheet), while Spotify has solid prospects to become the outright winner in digital audio. And, to get there, it needs to invest in line items such as research and development and whizz-kid coders.

It does leave a question though: when a few of these more spivvy names crack -- will it take the decent companies with them? To be honest, we don’t have a clue.