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A Follow up on Inflation: The Disparate Effects on Company Values!

Musings on Markets

In general, higher and more volatile inflation has negative effects on all financial assets, from stocks to corporate bonds to treasury bonds, and neutral to positive effects on gold, collectibles and real assets. The former is short hand for the small cap premium and the latter is the proxy for the value factor in returns.

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Market Resilience or Investors In Denial? A Mid-year Assessment for 2023!

Musings on Markets

In my second data update post from the start of this year , I looked at US equities in 2022, with the S&P 500 down almost 20% during the year and the NASDAQ, overweighted in technology, feeling even more pain, down about a third, during the year.

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Return on Equity, Earnings Yield and Market Efficiency: Back to Basics!

Musings on Markets

The first is that if markets are efficient, the price to book ratios will reflect the quality of these companies. In this example, for instance, business A, with a market value of equity of $150 million and a book value of equity of $60 million, will trade at 2.50

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Inflation and Investing: False Alarm or Fair Warning?

Musings on Markets

Interest rates : To understand the link between expected inflation and interest rates, consider the Fisher equation, where a nominal riskfree interest rate (which is what treasury bond rates) can be broken down into expected inflation and expected real interest rate components.

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EV/EBITDA Explained: A Key Valuation Multiple for Investors

Valutico

Cash & Cash Equivalents: Highly liquid assets like physical cash, bank balances, marketable securities (short-term investments easily converted to cash), a nd treasury bills. Other metrics like Price-to-Book or Dividend Yield are typically more relevant for these sectors.

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Data Update 1 for 2021: A (Data) Look Back at a Most Forgettable Year (2020)!

Musings on Markets

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. Micro Data The focus of my data collection is understanding how companies are operating and how investors are pricing them.

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Russia in Ukraine: Let Loose the Dogs of War!

Musings on Markets

Slicing the data based on sector yields the following: Against, there are no surprises, with energy being the only sector to post positive returns and with consumer discretionary and technology generating the most negative returns.

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