The conclusion is sound - "Today is different in funding than yesterday" Similar to other posters, I nitpick how he got there.
Nothing in efficient market theory suggests constant PE ratios over time. Nothing in efficient market theory suggests that your stock will be higher if you double your bookings. (If the initial price assumed 3x bookings, you'll tank even if the market is the same) PE ratios revert over long time horizons (many years) but even what is considered earnings changes over time.
That said, his conclusion is true. If you raise money in great times, you may need to take a hit in bad times. Better not to overpromise.
The Efficient Market Hypothesis is actually a family of hypotheses. Folk usually pick the strong EMH because it's easiest to transform into a strawman and beat about the head and neck.
Having particular bearing on the Horowitz post is this remark:
Commentary often seems to presume that EMH,
or notions of market rationality generally,
provide some implicit or explicit guarantee
that current prices will be sustained, which
is false. No guarantee against asset price
volatility follows from either.
Nothing in efficient market theory suggests constant PE ratios over time. Nothing in efficient market theory suggests that your stock will be higher if you double your bookings. (If the initial price assumed 3x bookings, you'll tank even if the market is the same) PE ratios revert over long time horizons (many years) but even what is considered earnings changes over time.
That said, his conclusion is true. If you raise money in great times, you may need to take a hit in bad times. Better not to overpromise.