When a company grows its asset base aggressively, it's almost always doing one of three things:

1. Issuing stock at a rich multiple to fund growth it can't fund internally

2. Buying other companies at poor prices because everyone else is

3. Pouring Capex into a trend it thinks is secular but is actually cyclical

All three eventually mean-revert.

Acquisitions get written down.

Returns on incremental Capex drift toward cost of capital.

Stock issued at peak multiples re-rates.

Cooper, Gulen & Schill (2008) found these firms underperform by ~8 percentage points a year for five years.

The growth itself isn't the problem. It’s the fact it’s growing faster than the business can fund.

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