Do you incorporate macroeconomics into decision-making?

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November 07, 2025

by a searcher from London School of Economics and Political Science, University of London in London, UK

Do you consider where we are in the economic cycle when deciding to proceed with a deal? Do you adjust your valuations (either the multiple or forward earnings) with this context?
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Reply by a searcher
in London, UK
To the extent that macroeconomics affect the discount rate you should use, absolutely! You can't not take account of that, otherwise you can end up investing in an illiquid asset for poorer risk-adjusted returns than you could get elsewhere. Beyond that, yes "macro" matters but more in the sense of the capital cycle of the specific industry - where you think it's at, how fast it tends to move, etc - rather than general or global macro topics that tend to be the focus of newspaper headlines.
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Reply by a searcher
from University of California, Los Angeles in Los Angeles, CA, USA
I do take macroeconomics when looking at particular deals, I think it's very relevant in particular if they have exposure to tariffs, international trade, government funding, etc. There is a lot of uncertainty and that affects the way I value the companies.
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