Americans hold over $1 trillion in cryptocurrencies. Has $1 trillion in wealth been created?
The only feasible explanation for the 10x run-up in Tesla’s stock price was a spreading narrative that it is more than a car company.
The demise of the value premium in the last 12 years has led to doubts regarding the efficacy of this approach and efforts to adjust the accounting ratios to make them more robust. Those efforts are misguided. Value investing amounts to comparing estimates of fundamental value with price and that accounting ratios, however tweaked, are not a reasonable way to estimate value – it requires a full-blown DCF analysis.
The “big market delusion” is when all firms in an evolving industry rise together, although as competitors ultimately some will win and some will lose.
Looking back over the last 15 months, the authors assess their success at identifying asset bubbles and anti-bubbles in April 2018. The scorecard is in their favor. More importantly, however, they review how their definitions of a bubble and an anti-bubble continue to provide useful insights for where investors can find value in today’s global markets.
With sky-high valuations in the US stock market, and what we believe is a tech bubble that has dangerous implications for other areas of the market, we suggest four actions investors can take now to avoid the inevitable bursting of the bubble, and which will likely benefit their portfolios’ long-term performance potential.
An analysis of five international stock markets indicates that published findings of a correlation between US stock returns and the political party in the White House are spurious, highlighting the importance of caution in interpreting historical investment data.