Download Memo as PDF Is it still the year of not good enough? We concluded our year-end 2020 investor memo by saying that 2021 will be “the year of not good enough.” This does not mean we are expecting an economic downturn. What it does mean is that the current expectations built into stock prices will
Economic Insights
CORNELL CAPITAL GROUP
Think of a company’s stock market capitalization as the present value of investor expected future cash flows. There are two ways this number can rise or fall. The first is related to the numerator, expected cash flows. For instance, expected cash flows can change when news arrives that affects investor expectations regarding the outlook for
Many of today’s investors, particularly the young aggressive Robinhood types, want big returns, and that is something more than the stock market, or the average stock, can provide. Read the academic literature, or Aswath Damodaran’s blog, Musings on Markets, and you will learn that investors can expect a return of about 6% per year on
BRADFORD CORNELLANDERSON GRADUATE SCHOOL OF MANAGEMENTASWATH DAMODARANSTERN SCHOOL OF BUSINESS Share 0 Tweet 0 Download PDF Abstract For much of the last century, value investors considered themselves to be the winners in the investment world, a result they attributed to their patience, maturity and good sense. That view, at least on the surface, was backed
Tweet 0 Share 0 Given the intense interest in the relation between stock prices, interest rates, and inflation, it is worthwhile to review basic concepts that tie them together. To start, it is critical to be clear what is meant by the interest rate – is it real or nominal? To review the difference, the
With all the talk about Bitcoin, at Cornell Capital Group we thought it is time to delve into the data. The data sample employed in the analysis consists of the daily returns on Bitcoin, the NASDAQ Composite Index, GLD (an ETF that tracks the price of gold), Tesla, and Amazon from January 1, 2015 through
Download Memo as PDF Expectations and Investment Returns To provide perspective on investing in 2021, at Cornell Capital Group we start with a fundamental concept from finance theory. The theory states that if a company performs according to the cash flow expectations reflected in the current market price of the stock investors will earn a
At a conference on quantum computing and finance on December 10, 2020, William Zeng, head of quantum research at Goldman Sachs, told the audience that quantum computing could have a “revolutionary” impact on the bank, and on finance more broadly. In a similar vein, Marco Pistoia of JP Morgan stated that new quantum machines will
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