More importantly to us is the notion that
equity prices seem extraordinarily cheap today versus «money», given the recent growth in FRB liabilities.
By late 1996, the rapid pace of increase in US
equity prices seemed to be an emerging source of concern to the US Federal Reserve, as it had the potential to cause imbalances which could ultimately undermine the continued expansion of the US economy.
Not exact matches
Fund managers cut their exposure to both commodities and emerging market
equities to record lows this month, as oil and metals
seem unable to shrug off
price weakness and China recession fears mount, new research shows.
If anything should be clear from the bubbles of recent years, the greatest risks are not when
prices are depressed, the economy is weak, and investors are frightened, but rather when
prices are elevated and an unendingly positive outlook for technology, or housing, or global growth, or private
equity, or emerging markets, or commodities
seems all but certain.
I agree that this isn't a particularly bad time for investing in
equities; it's just that it doesn't
seem a good time either, with stocks seemingly
priced for a strong recovery, leaving little room on the upside.
Fears about a trade war and monetary tightening
seem to have dissipated and low
equity prices were too good to pass up.
In February, Bertrams, the UK's second - biggest book wholesaler, was sold to private
equity backer Aurelius for half the sum it originally bid for the business (which itself
seemed like a knock - down
price for a business with sales of more than # 200m); last week the UK's biggest high street book chain Waterstones was sold to activist investor Elliott Advisors for a sum thought to be considerably less than its Russian owner Alexander Mamut once wanted; and this week the UK's biggest printer of black and white books, Clays, with sales of # 77m, was sold to Italian printer Elcograf for # 23.8 m.
The combined benefits of low mortgage rates, lower home
prices, and the first tme buyer tax credit program can
seem out of reach to borrowers with little cash or home
equity.
Though the brokerage firm benefits from rising
equity indices, higher trading and investment activity and a strong brokerage franchise that helps in attracting trillions of client dollars, Charles Schwab
seems to be
priced to perfection with a P / B ratio of 3.60.
Today's high
price of the U.S.
equity market
seems risky to me.
In a few cases, e.g., Apple Computer and Digital Equipment, much of the corporate wealth created
seems to have been dissipated by current difficulties; but the businesses remain quite strong, and they
seem to have quite large resources relative to the
prices of their
equities.
Bluntly, accounting systems do not
seem as if they can really be very helpful as a tool for predicting near - term
equity prices in OPMI markets.
It
seems unrealistic to suppose that, on average, the companies making up the S&P 500 would have such attractive access to capital markets that such a large amount of new
equity capital could be raised at those
prices.
Now, I can see how it may take some capital to realize value on the Titanic assets, but
equity at current
prices seems a bit of a steep
price to pay.
That conviction made a borrower's income and cash
equity seem unimportant to lenders, who shoveled out money, confident that HPA — house
price appreciation — would cure all problems.
If you think in terms of opportunity costs, it
seems irrational to adopt any investing rule unconnected to whether the position is undervalued and safe per traditional Graham / Buffett value metrics like PE,
price to cash flow, debt to
equity, current ratio, and DCF analysis.
Or, to put it another way, it would be a huge mistake to stay 100 % in stocks on the theory that «you can handle it» only to find that the reality of owning an all -
equity portfolio during a market meltdown like the 50 % - plus downturn from late 2007 to early 2009 is more financially and emotionally unsettling than it
seemed when stock
prices were at or near a peak.
But overall, considering the improved investor sentiment & likely near - term news / profits from its Iverson Road development, a 1.0
Price / Book ratio now
seems appropriate (based on adjusted
equity, to reflect the post year - end write - back of non-recourse Dunbar Assets loans):
[And look at the
equity markets: They certainly
seem to have this potential growth differential / lag more than
priced in — Europe's now on at least a 30 % P / E discount to the US.]
I certainly would not call
equity REITs as a group cheap; future returns rely on property
price appreciation, which doesn't
seem likely to me at present.
To me it
seems like you are taking the ROE — typically the ratio of net income to shareholder
equity — and modifying it to take into account the current stock
price (your invested
equity).
@lloydalter Opposition to proposed congestion
pricing for SF
seems to come primarily from progressives because «
equity» @rightlegpegged