Economic Insights
#60 Reflections on Investing : Cornell/Damodaran – The Equity Risk Premium
For more than four decades both Prof. Aswath Damodaran and Prof. Bradford Cornell have stressed the importance of the equity…
Investor Memo Q3 2024: Walking the Tightrope
Stock Price Performance in ReviewWe begin our Q3 2024 memo with a look back over the last ten years. The…
#59 Reflections on Investing : From Earnings to Prices – P/E Mulitples
The combination of P/E multiples and earnings determines stock prices – its basic math. In our last episode of Reflections…
#58 Reflections on Investing : Earnings, the Engine of the Stock Market
The ultimate source of value for common stocks is the earnings of corporations. In the last four and a half…
Tesla’s Valuation Fountain of Youth
Aswath Damodaran writes about what he calls the corporate life cycle.[1] He illustrates the life cycle with the graphic as…
Investor Memo Q2 2024: How Long Can This Go On?
The performance of the market was remarkable in the second quarter. Driven by the Magnificent 7 tech stocks, for which…
#57 Reflections on Investing : Risk and Return Revisited
A common refrain is that to get more return you have to bear more risk. But what exactly is risk?…
Structural Change and Valuation: Implications for Future Stock Returns
With stock prices at near record highs relative to measures like earnings or cash flow, many leading analysts have predicted…
Investor Memo Q1 2024: The Market Throws Caution to the Wind
The S&P 500 ended the year 2023 at 4,769. During December, several leading financial firms were asked for their forecasts…
#56 Reflections on Investing : The Medallion Fund vs Market Efficiency
Professor and Nobel Prize winner Eugene Fama put forth the efficient market hypothesis and based on that concept Warren Buffet…
#55 Reflections on Investing : Stock Prices – For Every Buyer There is a Seller
When attempting to explain movements in stock prices the media often overlook the key facts that for every buyer there…
#54 Reflections on Investing : Damodaran’s ERP and Future Stock Returns
The decade ending in 2023 was a great one for common stocks. Is the next decade likely to be as…