Quarterly investor memos, reflections on investing, and peer-reviewed academic publications from our team.
Our latest quarterly analysis examines the interplay between growing fiscal deficits, record corporate profits, and AI's transformative impact on future equity returns.
Market melt-ups, stretched valuations, and the AI narrative — what it means for your portfolio.
How markets navigated the turbulence and what the recovery tells us about forward returns.
Separating political noise from valuation fundamentals in a volatile quarter.
Elevated valuations and strong momentum create a precarious setup heading into 2025.
Markets balance between rate cuts and recession risk in a pivotal quarter.
Concentration in mega-cap tech intensifies as markets grind higher.
Record highs and plunging risk premiums define a market that refuses to worry.
_A market crash is nothing more than a low risk premium meeting risk aversion._
As John Cochrane notes, it is hard to understand stock price movements and related risks without taking account of variation in discount rates. While this is true in general, during the first nine mon
The market performance in the first half of 2023 was a surprise, to say the least. Whereas the year began with concerns about an impending recession, the market shrugged off those fears and moved dram
During the first quarter the story of both the fixed income and stock market revolved around the ongoing evolution of the yield curve. To review, the yield curve plots the yield on Treasury securities
As 2021 came to an end, the stock market party was going strong. The S&P 500 index closed at 4766.18 up 1,010 points or 26.9% for year to within a hair’s breadth of its all-time high. The Dow Jones (3
If markets are efficient in that prices always reflect fair value and expected returns on stock are constant, why would anyone need an investment manager? There are two answers. The first, put forth b
As 2021 draws to a close, our primary objective at the Cornell Capital Group remains protecting our client’s capital. In a market where valuations remain frothy this means a strategy of carefully comp
As 2021 draws to a close, our primary objective at the Cornell Capital Group remains protecting our client’s capital. In a market where valuations remain frothy this means a strategy of carefully comp
As the third quarter of 2021 draws to a close, investors face the same challenges: record high stock prices relative to any measure of earnings or revenue and record low interest rates. In this enviro
Once upon a time there was great concern about “market myopia” – the tendency of investors to be strongly focused on the short term at the expense of long-term benefits. Along with many CEOs, Nobel Pr
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
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 e
Welcome to the first of an ongoing series of Cornell Capital Group quarterly investor memos. The purpose of these memos is both to reflect on the current financial market environment and to explain ou
Exploring the history of the CAPE (Shiller PE) ratio, how it's calculated, and why its average has shifted over decades.
Passive investing has exploded over the past decade — but is it distorting stock prices and squeezing out returns?
We prompted Perplexity Labs to create a DCF for NVDA, MSFT, GOOG, META, AAPL and more — the results may surprise you.
Auto manufacturers trade at 7x earnings. Tesla's PE is in the hundreds. We revisit why.
One of the most basic concepts of investing — there's overwhelming evidence that when it comes to risk, most investors get it wrong.
The ultimate source of wealth from financial investments comes from the transfer of funds to entities that invest in the real economy.
The unsustainable growth of government debt and its implications for long-term investors.
A majority of stocks destroy wealth. Most all of the wealth creation from stocks is attributable to only a handful of companies.
Bradford Cornell and Aswath Damodaran discuss the equity risk premium and what it means for investors.
The ultimate source of value for common stocks is the earnings of corporations. In the last four and a half years the S&P 500 has risen 124%. How is that increase related to earnings and what does it
The combination of P/E multiples and earnings determines stock prices – its basic math. In our last episode of Reflections on Investing we looked at earnings, now we add in the role of the multiple.
A common refrain is that to get more return you have to bear more risk. But what exactly is risk? We revisit this important issue.
Professor and Nobel Prize winner Eugene Fama put forth the efficient market hypothesis and based on that concept Warren Buffet suggested that holding a passive investment in the S&P 500 was the best a
When attempting to explain movements in stock prices the media often overlook the key facts that for every buyer there is a seller and every outstanding share must be held continuously.
The decade ending in 2023 was a great one for common stocks. Is the next decade likely to be as good? We provide an analysis using Damodaran’s equity risk premium (ERP) and a framework developed by Jo
Would you believe, that long-term US Treasury securities, historically considered one of the safest investments, have now dropped more than the stock market did during the great recession of 2008? Wha
Real Interest Rates have an immense impact on the stock market as well as the bond market. Nonetheless, they are widely misunderstood.
Is a large daily drop in the market a buying opportunity? We used 60 years of daily data to see what happens after the market drops.
In August of 2020 Apple issued a 40 year, 2.55% bond, two years later that bond is down nearly 40%. Apple’s stock on the other hand is up over 50% in that same period. Why is that and what does it imp
One of the most difficult problems for fundamental value investors is reconcliling value and momemtum.
Presently just five US tech companies account for nearly 25% of the S&P 500 market cap. We discuss resurgence of big US tech and what it means for investors.
Prof. Bradford Cornell explains how fundamental valuation analysis can potentially uncover market inefficiencies. As an example, Prof. Cornell revisits our publication “Valuing the Automotive Business
Hello and welcome back to Reflections on Investing with the Cornell Capital Group, and today we’re going to talk about something that’s been somewhat forgotten in recent years, corporate debt. We thin
While 2020/2021 were great years for our High Fliers, in 2022 the party ended and many of those companies like Peloton, Wayfair and Carvana came crashing down.
How can an option trade make 4000% in one day? Tesla stock has been highly volatile and one of the drivers of this volatility is the unusually large volume of options trading. Are large proportion of
In October of 2021 we reviewed the Howard Marks Checklist from Mr. Marks’ book “Mastering the Market Cycle.” Since then conditions in the market have changed dramatically so we felt it was time to rev
We revisit “Valuing The Automotive Industry” our in depth report from last year.
We explain the approach to valuing the S&P 500 developed by NYU Professor Aswath Damodaran a co-author with our senior advisor Professor Bradford Cornell, and explain its relevance to current market c
The market’s worst day of 2022 was September 13th when the Bureau of Labor’s Consumer Price Index came in higher then expected. A month later the next CPI release was a similar surprise however the ma
There is an inverse relationship between current investment performance and expected future performance. Understanding why is a key to maximizing long-run risk adjusted returns.
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 misunderstandin
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
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 Pr
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 practic
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 unjusti
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
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 scruti
Growth in earnings doesn’t necessarily equate to growth in a stock’s price. A company’s growth must meet or exceed the expectations of its investors to increase the stock price. When they fall short
Recent times have been dreadful for investors especially for holders of growth and tech stocks (See “The Crash of the High Fliers”) . Many are waiting for signs of an upturn. Do a few big up days mean
Elon Musk recently proposed a buyout of Twitter at 54.20 per share. Twitter stock traded over 50 following the news but in recent weeks the stock has dwindled. What can we infer from Twitter’s stock p
Until recently fixed income has offered high risk and low return. It looks like things might be changing. We take another look.
For many investors options are associated with high leverage and high risk. However, options can be used to manage risk and enhace the risk/return menu.
For many investors options are associated with high leverage and high risk. However, options can be used to manage risk and enhace the risk/return menu.
The market’s incredible performance post Covid was driven largely by growth and tech. Some of these companies were up 300, 400 even 700 perecent, companies such as Wayfair, Peloton, Zoom and Cathie Wo
Volatility in the market is up once again but what does that mean for your investments?
The Price to Earnings Ratio (P/E) is one of the most frequently figures for comparing valuation. We explore the relationship between P/E, investor expectations and sentiment.
Prof. Bradford Cornell discusses how the book value, forecast value and speculative value contribute to the market price of a stock.
Tesla has become just the sixth company to reach a market cap of one trillion, joining tech giants Apple, Google, Microsoft, Amazon and Facebook. We compare each of these companies at the 500 billion
How does a company like Tesla create so much value compared to competitors like Ford and General Motors? Is Tesla doing more with less? We take a closer look at the relationship between a company’s en
Since the outbreak of Covid 19 a lot of things have changed. With many new retail traders and interest in the stock market has investing changed?
The market is cyclical, but what part of the cycle are we in? To better understand where we are in the market cycle we review a checklist from Oak Tree Capital founder Howard Marks.
In this video, we explore the history of the CAPE (Shiller PE) ratio, how it’s…
In this video, we explore the history of the CAPE (Shiller PE) ratio, how it’s…
Download PDF Key Points S&P 500 returns (954.5%) following the 2008 Global Financial Crisis…
In this video, we explore the history of the CAPE (Shiller PE) ratio, how it’s…
In this video, we explore the history of the CAPE (Shiller PE) ratio, how it’s…
In this video, we explore the history of the CAPE (Shiller PE) ratio, how it’s…
Download PDF Key Points S&P 500 returns (954.5%) following the 2008 Global Financial Crisis…
Download PDF Key Points S&P 500 returns (954.5%) following the 2008 Global Financial Crisis…
Download PDF Key Points S&P 500 returns (954.5%) following the 2008 Global Financial Crisis…
Download PDF Key Points S&P 500 returns (954.5%) following the 2008 Global Financial Crisis…
Download PDF Key Points S&P 500 returns (954.5%) following the 2008 Global Financial Crisis…
Download PDF Key Points S&P 500 returns (954.5%) following the 2008 Global Financial Crisis…
Download PDF Key Points S&P 500 returns (954.5%) following the 2008 Global Financial Crisis…
Download PDF Key Points S&P 500 returns (954.5%) following the 2008 Global Financial Crisis…
In this video, we explore the history of the CAPE (Shiller PE) ratio, how it’s…
Download PDF Key Points S&P 500 returns (954.5%) following the 2008 Global Financial Crisis…
Download PDF Key Points S&P 500 returns (954.5%) following the 2008 Global Financial Crisis…
Rob Arnott, Bradford Cornell, Forrest Henslee, Thomas Verghese
Bradford Cornell
Bradford Cornell
Bradford Cornell, Shaun Cornell
Bradford Cornell, Shaun Cornell
Bradford Cornell
Bradford Cornell
Bradford Cornell, Rob Arnott, Lillian Wu
Bradford Cornell, Aswath Damodaran
Bradford Cornell, Shaun Cornell, Andrew Cornell
Bradford Cornell
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