Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
These are good times, aren’t they? Record high S&P 500. Record high NASDAQ. And chart after chart after chart of the economy that looks just like this:
Hey, if that isn’t a “V”, I’m not sure what letter of the alphabet it is! So, yeah, good times. All is well.
(more…)Well, it’s that time of year again – – late August, when the annual Jackson Hole conference o’ surprises appears. This article from Bloomberg makes it plain what’s coming up with the big closing speech this Thursday morning………..
With the stock prices rising so dramatically for many companies on apparently so little news, we academics take a lot of kidding about the efficient market hypothesis which says that the market price of a stock fairly reflects fundamental information about the company. Just what fundamental information is the market reflecting? In our defense, it is important to draw a distinction between informational market efficiency and fundamental market efficiency. As described in our book, The Conceptual Foundations of Investing, a market is said to be informationally efficient if it responds quickly to new information.
Tesla is a poster child for informational efficiency. The stock responds almost instantaneously to slightest hint of news. A tweet by Elon Musk can set the stock moving the instant after he hits the return key. But fast response to information is not the same thing as a fundamentally correct response to information. A market is said to be fundamentally efficient if stock prices fairly reflect fundamental value. That means when the stock price moves in response to information, it moves the right amount.
(more…)This is seriously fascinating. Just look what a gargantuan difference multiple expansion has made to the most valuable companies. Seriously delusional, but real nonetheless.
