Economic Insights

Building off our previous episode, we dig into the relationship between current price ratios, future expected earnings growth, and future stock market returns. It turns out there are important practical implications for investment management.   

Finance theory in recent years has stressed the importance of changes in the discount rate for explaining movements in stock prices. In this video, we describe how this works using data provided by Prof. Aswath Damodaran.  You can find both Damodaran’s annual paper on the equity risk premium and his calculation of the ERP for

As former US Secretary of Treasury Larry Summers has stressed, the real interest is an important indicator of the impact of Federal Reserve policy. In this short video we take a look at real interest rates through history.

Relative price changes, changes in the price of one good or service relative to others, are often confused with inflation but are fundamentally different. This difference can lead to a misunderstanding of the causes of inflation. In this video, we explain the difference and what it implies for policies to control inflation. 

The Shiller CAPE Ratio is often referenced yet at times not fully understood. In this latest installment, Prof. Bradford Cornell starts at the source and breaks down this popular metric in detail.

From the pandemic lows of March 2020 to the end of 2021, stocks had an incredible run. Earnings were up but so too were P/E ratios. As the market climbed many warned that valuations had become unjustifiably high.  With the S&P 500 down nearly 20%, P/E ratios have returned to their historic average leaving many

There has been an explosion of interest in ESG investing, in part because many investors believe it leads to superior investment returns. Unfortunately, that belief does not stand up to careful scrutiny as we explain in this latest episode.