Stock Price Performance in ReviewWe postponed publication of our quarterly memo awaiting the statement from President Trump on tariffs. That turned out to be wise. His statement hit the market, which was already down from year-end 2024, like a bomb. The impact of that bomb is encapsulated by three related facts.The S&P 500 dropped from
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The P/E for automobile manufacturers is normally very low. Ford, GM and Toyota currently trade at 7 times earnings. Tesla’s P/E of 114 is unique in the auto industry. Elon Musk’s promises of future growth from humanoid robots and robotaxis have sustained Tesla’s high price but investors should be cautious as stock prices built on
By Rob Arnott, Bradford Cornell, Forrest Henslee, Thomas Verghese March 2025 Key Points Big market delusions (BMD) develop when investors anticipate that most early entrants in an exciting new market/technology will generate outsized returns. The recent electric vehicle (EV) craze demonstrates BMDs’ three-stage cycle of Frenetic expansion, eye-popping valuations, and painful consolidation.Despite all the EV hype, a portfolio of
Six years ago, our Senior Advisor, Prof. Cornell, delivered a thought-provoking keynote at the Claremont Colleges on the Conceptual Foundations of Finance. Its insights remain highly relevant, especially in today’s volatile stock market. We invite you to watch and explore ideas that continue to challenge and inspire financial thinking.
The perception of risk has a major impact on the level of market prices and helps to explain the increase in prices over the last 15 years. Today, we’re going to talk about one of the most basic concepts of investing—risk. There’s overwhelming evidence that when it comes to a large part of their net worth,
Stock Price Performance in Review The year 2023 ended on a high note. During the year, the S&P 500 Index rose 24.2% to close the year at 4,769.83. The total return on the index, including dividends, was 26.3%. However, as of December 2023, analysts predicted a more sedate 2024. Exhibit 1 shows the average forecast for
With stock prices at near record highs relative to measures like earnings or cash flow, many leading analysts have predicted meager returns over the next decade. Some have even suggested the return on the S&P 500 could be negative over the upcoming decade. Others have raised the possibility of a short-term collapse of 20% or
As Herb Stein “if something cannot go on forever, it will stop”. The current growth of government debt is unsustainable. How will it stop? And what does that mean for investors? Hello, and welcome back to *Reflections on Investing with the Cornell Capital Group.* Today, we’re going to talk about government debt. Of course, this
A majority of stocks destroy wealth. In fact, most all of the wealth creation from stocks is attributable to only a handful companies. Today, we’re going to talk about something that is particularly important to investors: corporate value creation. Ultimately, the true hit investments are companies that create very significant value over and above what
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