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Data Update 1 for 2025: The Draw (and Danger) of Data

Musings on Markets

Not surprisingly, the company listings are across the world, and I look at the breakdown of companies, by number and market cap, by geography: As you can see, the market cap of US companies at the start of 2025 accounted for roughly 49% of the market cap of global stocks, up from 44% at the start of 2024 and 42% at the start of 2023.

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Data Update 1 for 2024: The data speaks, but what does it say?

Musings on Markets

EBIT & EBITDA multiple s 5. Working capital needs Thus, I compute pricing multiples based on revenues (EV to Sales, Price to Sales), earnings (PE, PEG), book value (PBV, EV to Invested Capital) or cash flow proxies (EV to EBITDA). Long term Reinvestment (Cap Ex & Acquisitons) 4. Be patient.

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META Lesson 3: Tell me a story!

Musings on Markets

In this post, I want to focus on that point, starting with a discussion of why stories matter to investors and traders and the story that propelled the company to a trillion-dollar market capitalization not that long ago. billion in revenues in 2021. billion.

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Invisible, yet Invaluable: Valuing Intangibles in the Birkenstock IPO!

Musings on Markets

A more tangible way to see why intangibles have become a hot topic of discussion is to look at the evolution of the top ten companies in the world, in market capitalization, over time: In 1980, IBM was the largest market cap company in the world, but eight of the top ten companies were oil or manufacturing companies.

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The Sharing Economy come home: The IPO of Airbnb!

Musings on Markets

For instance, if the market capitalization of Airbnb today is $60 billion, you would need it to deliver gross billings of $200 billion in 2031, with an operating margin of close to 35%. In fact, it is these differences that allow for buyers and sellers to co-exist in the market.

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Russia in Ukraine: Let Loose the Dogs of War!

Musings on Markets

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.

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Data Update 6 for 2023: A Wake up call for the Indebted?

Musings on Markets

In fact, at a zero percent tax rate, the optimal debt ratio, if you define it as the mix that minimizes cost of capital is zero. Cash generating capacity : Debt payments are serviced with operating cash flows, and the more operating cash flows that firms generate, as a percent of their market value, the more that they can afford to borrow.