Download PDF There are two primary factors that affect expected returns for companies with high ESG ratings – investor preferences and risk. Although investor preferences for highly rated ESG companies can lower the cost of capital, the flip side of the coin is lower expected returns for investors. Regarding risk, the jury remains out on
Economic Insights
CORNELL CAPITAL GROUP
On August 31st Tesla’s latest bull run ended when the stock closed at an all-time of $498.50 per share. At that price, the market cap value of Tesla was $464 billion, an amount greater than Ford, GM, Daimler, Volkswagen, and former number one Toyota put together. With Tesla approaching $500 billion, a level reached by
The tech giants are trading at valuation ratios that are close to unprecedented for such large companies. Currently, Amazon trades at a nosebleed price/earnings multiple of 122. Apple’s multiple is 33 which is extraordinary for a hardware manufacturer. Netflix clocks in at 84. Tesla leads the pack at 752, but
Using criteria based on environmental, social and governance (ESG) considerations has become an increasingly important aspect of investment decision making, particularly for high profile institutional investors. As of 2019, sustainable assets under management were estimated to be $30 trillion worldwide. The claim here is that the enthusiasm for ESG investing has been exaggerated for three
It is often said that once you have a hammer, everything looks like a nail. So be it with the big market delusion. Since Aswath Damodaran and I published our article “The Big Market Delusion,” evidence of the delusion has been popping up everywhere – at least in my opinion. The latest instance is the
In a previous post, I described a new index introduced by the Cornell Capital Group called the CCG Quarantine Index. The index tracks the performance of the stocks that are likely to benefit from the fact that millions of people are more or less confined to their homes during the lockdown. The index is composed
Up through the end of 2006, one of the most widely reported results in empirical studies of investing was the so-called “value effect” which stated that value stocks tended to outperform growth stocks. As a quick review, a growth stock is one for what the price is high relative to measures such as book value
Bradford Cornell and Aswath Damodaran In the last decade, companies have come under pressure to be socially conscious and environmentally responsible, with the pressure coming sometimes from politicians, regulators and interest groups, and sometimes from investors. The argument that corporate managers should replace their singular focus on shareholders with a broader vision, where they also
Interpreting movements in the stock market is difficult enough in normal times. The Covid-19 crisis has made it all the more difficult with the market lurching up and down as it attempts to process news about the virus and its economic implications. To help investors make sense of the financial gyrations, the Cornell Capital Group
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