Cornell Capital Group’s Economics Blog. Brad Cornell teaches financial economics at the California Institute of Technology.
Welcome to the first of an ongoing series of Cornell Capital Group quarterly investor memos. The purpose of these memos is both to reflect on the current financial market environment and to explain our future outlook. With the impact of…
Back in April 2020, we introduced two new indexes – the Cornell Capital Group (CCG) Quarantine Index and the CCG anti-Quarantine index. The Quarantine Index was composed of what might be called, stay at home, work at home stocks. Typical companies…
On August 31st Tesla's latest bull run ended when the stock closed at an all-time of $498.50 per share. At that price, the market cap value of Tesla was $464 billion, an amount greater than Ford, GM, Daimler, Volkswagen, and…
The tech giants are trading at valuation ratios that are close to unprecedented for such large companies. Currently, Amazon trades at a nosebleed price/earnings multiple of 122. Apple’s multiple is 33 which is extraordinary for…
It is often said that once you have a hammer, everything looks like a nail. So be it with the big market delusion. Since Aswath Damodaran and I published our article “The Big Market Delusion,” evidence of the delusion has…
In a previous post, I described a new index introduced by the Cornell Capital Group called the CCG Quarantine Index. The index tracks the performance of the stocks that are likely to benefit from the fact that millions of people…
Up through the end of 2006, one of the most widely reported results in empirical studies of investing was the so-called “value effect” which stated that value stocks tended to outperform growth stocks. As a quick review, a growth stock…
Interpreting movements in the stock market is difficult enough in normal times. The Covid-19 crisis has made it all the more difficult with the market lurching up and down as it attempts to process news about the virus and its…
I have written about the problem of valuing the S&P 500 in previous columns, but the issue is so important it is worth revisiting one more time. After all, the overall level of the market is the tide which raises…
It is one thing to say that the market is volatile. It is quite another to appreciate fully what that really means. So let’s spend a moment to dissect volatility. The Current Level Of Volatility The first thing to make…