This would lead to
low asset prices, and therefore high rates of return.
A second example is one in which the economy is in recession, or operating below potential, and the financial system is going through a phase of deleveraging and
low asset prices (Chart 1, see «Case 2»).
Unlike 2008, I want to have a cash fund ready to take advantage of
lower asset prices in the next bear market!!
Unlike 2008, I want to have a cash fund ready to take advantage of
lower asset prices in the next bear market!!
One of the trickiest calculations in creating scenarios for the direction of consumer spending and the economy may be how consumers react to
lower assets prices.
Not exact matches
The minutes of the Fed's June meeting noted that «some participants suggested that increased risk tolerance among investors might be contributing to elevated
asset prices more broadly; a few participants expressed concern that subdued market volatility, coupled with a
low equity premium, could lead to a build - up of risks to financial stability.»
The latest change in tone may also reflect an additional concern - that
low interest rates are fostering financial instability by promoting bubbles in
asset prices and stimulating excessive credit creation.
For instance, large - scale development costs per
asset have gone up while pressures from insurance companies and benefits managers to
lower prices have also increased.
Gold
prices fell to the
lowest in nearly six weeks on Monday as the US dollar strengthened and easing tensions on the Korean peninsula helped boost appetite for higher risk
assets such as stocks.
So, while
low oil
prices will make this a trying quarter for the entire energy industry, companies with a more balanced portfolio of
assets should fare better than the pure - plays.
The converse applies in down turns, cut production to maintain
price value and cut costs and improve efficiencies, Additionally use
low cost debt to buy
assets for future development with debt to be repaid in booms.
What that means is that you are in an environment that is going to have further trouble in terms of investment returns that are in areas that are based on economic growth and areas that do relatively well like bonds... Broadly speaking, I think that investors should be looking for
lower prices on most risk
assets in these developed countries with the exception of Japan.»
Still, the Fed chairman reiterated his argument that
lower rates boost growth by helping increase
prices of stocks, homes and other
assets.
There are definitely abuses of the system, such as the likes of Mitt Romney sticking ridiculously
low -
priced assets into retirement accounts.
Williams's confidence may come from his predecessor, Rick George, who used periods of
low oil
prices to snap up
assets, exploit economies of scale and accrue shareholder value.
They had never really before tried to limit the negative effects of
low interest rates —
asset -
price bubbles — while at the same time as applying a heavy dose of monetary stimulus.
«Particularly with oil
prices hitting
lows at some point in the first quarter... lots of sub investment - grade firms could be under a lot of stress, and for those with stronger balance sheets, those companies could take this as an opportunity to buy and acquire
assets,» Deshpande said in a phone interview.
«We like buying companies or
assets that have some hair on them, which means you get them at a somewhat
lower price.
«While
asset monetizations enhance our liquidity, sales of producing natural gas and oil properties adversely affect the amount of cash flow we generate and reduce the amount and value of collateral available to secure our obligations, both of which are exacerbated by
low natural gas
prices..
Low oil and gas
prices have pressured the value of many of his
assets.
Actual results, including with respect to our targets and prospects, could differ materially due to a number of factors, including the risk that we may not obtain sufficient orders to achieve our targeted revenues;
price competition in key markets; the risk that we or our channel partners are not able to develop and expand customer bases and accurately anticipate demand from end customers, which can result in increased inventory and reduced orders as we experience wide fluctuations in supply and demand; the risk that our commercial Lighting Products results will continue to suffer if new issues arise regarding issues related to product quality for this business; the risk that we may experience production difficulties that preclude us from shipping sufficient quantities to meet customer orders or that result in higher production costs and
lower margins; our ability to
lower costs; the risk that our results will suffer if we are unable to balance fluctuations in customer demand and capacity, including bringing on additional capacity on a timely basis to meet customer demand; the risk that longer manufacturing lead times may cause customers to fulfill their orders with a competitor's products instead; the risk that the economic and political uncertainty caused by the proposed tariffs by the United States on Chinese goods, and any corresponding Chinese tariffs in response, may negatively impact demand for our products; product mix; risks associated with the ramp - up of production of our new products, and our entry into new business channels different from those in which we have historically operated; the risk that customers do not maintain their favorable perception of our brand and products, resulting in
lower demand for our products; the risk that our products fail to perform or fail to meet customer requirements or expectations, resulting in significant additional costs, including costs associated with warranty returns or the potential recall of our products; ongoing uncertainty in global economic conditions, infrastructure development or customer demand that could negatively affect product demand, collectability of receivables and other related matters as consumers and businesses may defer purchases or payments, or default on payments; risks resulting from the concentration of our business among few customers, including the risk that customers may reduce or cancel orders or fail to honor purchase commitments; the risk that we are not able to enter into acceptable contractual arrangements with the significant customers of the acquired Infineon RF Power business or otherwise not fully realize anticipated benefits of the transaction; the risk that retail customers may alter promotional
pricing, increase promotion of a competitor's products over our products or reduce their inventory levels, all of which could negatively affect product demand; the risk that our investments may experience periods of significant stock
price volatility causing us to recognize fair value losses on our investment; the risk posed by managing an increasingly complex supply chain that has the ability to supply a sufficient quantity of raw materials, subsystems and finished products with the required specifications and quality; the risk we may be required to record a significant charge to earnings if our goodwill or amortizable
assets become impaired; risks relating to confidential information theft or misuse, including through cyber-attacks or cyber intrusion; our ability to complete development and commercialization of products under development, such as our pipeline of Wolfspeed products, improved LED chips, LED components, and LED lighting products risks related to our multi-year warranty periods for LED lighting products; risks associated with acquisitions, divestitures, joint ventures or investments generally; the rapid development of new technology and competing products that may impair demand or render our products obsolete; the potential lack of customer acceptance for our products; risks associated with ongoing litigation; and other factors discussed in our filings with the Securities and Exchange Commission (SEC), including our report on Form 10 - K for the fiscal year ended June 25, 2017, and subsequent reports filed with the SEC.
The company has also had to take big losses related to write - downs of the value of its oil and gas
assets, to reflect the
lower prices these energy commodities are garnering on the open market.
Since then, though, NGL Energy has divested some of the same
assets, which
lowered its revenue more than 30 % in fiscal 2016, but boosted its sagging stock
price.
Oil companies are profiting after they cut costs and sold
assets to adjust to an era of
lower oil
prices after...
Although they're «one of the more expensive areas» in biopharmaceuticals, since «you are literally saving people's lives, the payers have a harder time pushing back and
lowering the
price,» said Michael Rich, who provides health - care coverage for Eagle
Asset Management's Equity Income team.
It's worth noting that the cryptocurrency fund fees are still much higher than comparable passive stock market funds, with S&P 500 index funds
priced as
low as.05 % of
assets.
The plan is China's contribution to a global effort to stamp out the common practice of multinationals altering the
price put on labor, services or intangible
asset transfers within global operations to allow firms to divert profits to
low - tax countries.
Lower commodity
prices, a stronger dollar, and a rush to US
assets are all good for the US.
Lower interest rates will do nothing but inflate
asset -
price bubbles if there is reduced demand for goods and services.
Scoring a major
asset at a time when oil
prices had hit major
lows has transformed Perth - based junior Kalrez Energy NL from a gold explorer to an oil and gas producer.
Treasury
prices cut earlier losses on Monday, pushing yields slightly
lower, after stocks fell sharply, pushing investors into haven
assets like government bonds.
For companies involved in capital intensive activities, such as the auto companies and railroads, you are going to see much
lower price to cash flow multiples because investors know that much of the money is going to have to be poured back into equipment, facilities, materials, and fixed
assets or else the firm will be hurt.
Compared with a conversion when
asset prices were higher, a conversion in a downturn may result in a
lower tax bill for the same number of shares.
To the extent that the factors affecting capital flows act to raise
asset prices,
lower interest rates and reduce risk premiums, it is harder for the markets to assess how much of the currently very favorable conditions are likely to reflect fundamentals and prove more durable.
With market volatility hitting multi-decade
lows, junk bond yields also at record
lows, the median
price / revenue ratio of S&P 500 constituents at a record high well - beyond 2000 levels, and the most strenuously overvalued, overbought, overbullish syndromes we define, I'm increasingly concerned about the potential for an abrupt «air pocket» in the
prices of risky
assets that could attend even a modest upward shift in risk premiums.
Recovery is now in its ninth year with relatively slow underlying growth for demographic and technological reasons, very
low unemployment and high
asset prices.
The attack has likely sharply
lowered the
price Avid Life could muster in any sale of
assets, assuming it could find a buyer willing to take on a company facing several multi-million dollars lawsuits and the challenge of rebuilding a computer network that has been so badly infiltrated.
One of the more common responses to the fact that inflation is
low is the idea that the inflation is all in
asset prices.
... The
pricing of financial
assets, and today's extraordinarily
low interest rates indicate that a flight from the dollar is the last thing expected in financial markets.
Basically, in the High /
Low options, you predict the final
price of an underlying
asset relative to its current
price.
As Nobel economist (and one of my dissertation advisors at Stanford) Joe Stiglitz noted on Friday, a good part of the reason for rising oil
prices is because the producers are already awash in U.S.
assets, and to supply significantly more oil will just force them to accumulate more
low - return
assets.
Biofuels don't help, but biofuels are the result of high oil
prices, which are the result of poor incentives to bring oil up (both because of
low yielding U.S.
assets and political resentment over U.S. foreign policy).
A long period of
low rates has encouraged investors to assume greater risk in the stretch for yield, inflating
asset prices.
The hierarchy gives the highest priority to valuations based upon unadjusted quoted
prices in active markets for identical
assets or liabilities (Level 1 measurements) and the
lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements).
For example,
lower rates have accelerated purchases of cars and other consumer durables and created apparent increases in wealth as
asset prices inflate.
Shares are bought and sold at market
price, which may be higher or
lower than the net
asset value (NAV).
The Fed's accommodative monetary policy after the recession helped goose stock
prices, in part by
lowering yields on safer
assets like Treasury bonds.
ETF shares are bought and sold at market
price, which may be higher or
lower than the net
asset value (NAV).
Zaitech - practicing firms obtained
low - interest loans and used them to purchase stocks and real estate, which surged and helped the firms to report blowout earnings as long as
asset prices continued to rise.
Conversely, when
prices are trending
lower (and reach a major trough before reversing), we can see that excessive demand is entering the market as investors look to buy the
asset at cheaper
prices.