Cornell Capital Group’s Economics Blog. Brad Cornell teaches financial economics at the California Institute of Technology.
Many of today’s investors, particularly the young aggressive Robinhood types, want big returns, and that is something more than the stock market, or the average stock, can provide. Read the academic literature, or Aswath Damodaran’s blog, Musings on Markets, and…
BRADFORD CORNELLANDERSON GRADUATE SCHOOL OF MANAGEMENTASWATH DAMODARANSTERN SCHOOL OF BUSINESSAbstractFor much of the last century, value investors considered themselves to be the winners in the investment world, a result they attributed to their patience, maturity and good sense. That view,…
Given the intense interest in the relation between stock prices, interest rates, and inflation, it is worthwhile to review basic concepts that tie them together. To start, it is critical to be clear what is meant by the interest rate…
With all the talk about Bitcoin, at Cornell Capital Group we thought it is time to delve into the data. The data sample employed in the analysis consists of the daily returns on Bitcoin, the NASDAQ Composite Index, GLD (an…
Expectations and Investment Returns To provide perspective on investing in 2021, at Cornell Capital Group we start with a fundamental concept from finance theory. The theory states that if a company performs according to the cash flow expectations reflected in…
At a conference on quantum computing and finance on December 10, 2020, William Zeng, head of quantum research at Goldman Sachs, told the audience that quantum computing could have a “revolutionary” impact on the bank, and on finance more broadly…
Based on the dot.com experience, popping bubbles are often associated with the complete collapse of companies like eToys, Pets.com or Webvan, but that is as much the exception as the rule. It is equally common that following an immense and…
At Cornell Capital Group we think that simple stock price indexes can provide insight into how the market has moved in the past and maybe even how it might behave going forward. For this reason, shortly after the onset of…
In a famous editorial published in the Wall Street Journal, Warren Buffett and Jamie Dimon, the chairmen of Berkshire Hathaway and JP Morgan respectively, took the stock market to task for being too short-term oriented. The authors state that “This…
Most stock valuation chatter on the internet focuses on companies with great growth opportunities like Zoom, Wayfair and Peloton or well known companies whose stocks have outperformed like Apple and Amazon. Here we take a look at the other side…