Growth fetishists are an optimistic lot

The other day Marketplace did a long segment on investors' obsession with growth in the tech sector. It was well done and more balanced than most reporting in the area (financial journalists tend to get very starry-eyed on the subject), but the show's best quote on the topic was buried deep in an entirely different piece.

This growth shows no signs of slowing. This year Shake Shack made its initial public offering on the New York Stock Exchange and was valued at $21 per share. That number has tripled since then, with even higher peaks in the interim. The company says it plans to build only 450 locations, but investors are already predicting bigger expansion.

 I really wish I had a transcript of the interview -- this summary doesn't capture the disconnect that comes through in the actual conversation -- but you can still see the problem here. The CEO (who comes off as quite sharp in the interview) says they have a hard limit on growth because expanding too quickly would severely damage the brand.

In the murky world of investing, this is the closest you will get to a clear boundary. Senior management has publicly committed to it repeatedly and it is baked into the business model, but analysts have gotten so good at creating these wishful thinking feedback loops that even
CEO of the company in question can't disrupt the flow.