I am wondering if my reasoning is sound. I reason that, if a sector has a shortage in talent, the valuations of stocks/funds, in said sector, generally increases.
For example, if there was a shortage of cloud talent, but the demand for cloud services was expected to remain steady or increase at a steady rate, would one expect to see the price of stocks/funds increase?
I could also, however, reason that the higher cost for talent, in this scenario would drive down valuations?
Am I thinking about this scenario reasonably; If so, which line of thought is most inline with conventional thinking. Is my reasoning completely off base?