Musings on Markets
MAY 7, 2023
I also used the banking framework to argue that good banks have stickier deposits, with a higher precent of these deposits being non-interest bearing, that they invest in loans and investment securities on which they earn interest rates that cover and exceed the default risk in these investments. All Equity, All the time!
Musings on Markets
JANUARY 27, 2022
While we have increasingly given central banks primacy in discussions of interest rates, it remains my view that markets set rates, and while central banks can nudge market expectations, they cannot alter them. Connecting this linkage to the discussion of US inflation in the prior sections, here are the takeaways.
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Musings on Markets
MARCH 19, 2022
The table below summarizes the market cap change, by region of the world: It is no surprise that Eastern Europe and Russia, which are in the eye of the hurricane, have seen the most damage to equities, but other than the Middle East, every other equity market in the world is down, with the US, EU and China shedding significant market capitalization.
Musings on Markets
JANUARY 9, 2021
Consider, for instance, an investor who picks stocks based upon price to book ratios, who finds a stock trading at a price to book ratio of 1.5. While some of the companies in this data trace their existence back decades, there is a healthy proportion of younger companies, many in emerging markets and new industries.
Musings on Markets
MARCH 25, 2021
The second and more powerful factor is that the reason that a central bank is able to signal to markets, only if it has credibility, since the signal is more about what the Fed sees, using data that only it might have, about inflation and real growth in the future.
Musings on Markets
JULY 17, 2023
That does not surprise me, since I have never bought into the “Fed did it” theme, and have written multiple posts about why it is inflation and economic growth that drive interest rates, not central banks. trillion in market value in the first six months in the year , but the severity of last year's decline has still left them $14.4
Musings on Markets
JANUARY 19, 2022
I do believe that too much is often made of these differences, as it is generally more the rule than the exception that markets, when they are up strongly, get the bulk of that rise from a small sub-set of stocks or sectors. The results are similar if you break stocks down based upon price to book ratios or revenue growth rates.
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