On February 19th, Chipotle had a market capitalization of $25.93 billion. Today it hit a new all-time high of $26.78 billion. What makes this story so interesting is what happened in between.
From the peak of ~$26 billion February, in just 20 sessions, the market cap fell to ~$13 billion. 57 sessions later, it’s at a new all-time high.
I understand that we just experienced an economic shutdown that is without precedent, but come on, how hard is it to value a burrito company?*
People will look at this and go “pff, efficient markets.” I get it, but to me the efficient market hypothesis doesn’t mean the price is always correct. If everybody agreed that prices were right every second of the day, there would never be any reason to buy or sell. Markets are efficient in the sense that we cannot consistently asses whether the price is too high or too low.
It’s easy to point to charts like this after the fact and scoff, it’s hard to point to them in real time and make money.
*Disregard everything I said in this post