Shared values
Article Abstract:
Stock prices can change with little apparent reason. Stocks can be assessed in terms of future and present income flows, yet future flows cannot easily be forecast, and many companies do not provide a dividend or income flow. The earnings yield is another measure, and US stock prices appear overvalued using this measure. There is also a debate on risk premiums. Investors are advised to spread risks by diversifying and buying stocks that do not have price trends that coincide. There is a debate as to whether risk premiums have previously been overestimated.
Publication Name: The Economist (UK)
Subject: Business, international
ISSN: 0013-0613
Year: 1999
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Sliding floors
Article Abstract:
The US dollar has dropped in value in relation to the Japanese yen and German mark. This has surprised some analysts due to high US interest rates compared to those of Japan and Germany, and the view of the dollar as a safe haven. There are predictions that US economic growth could slow, and US interest rates will drop. The US is likely to be hit by a drop in stock prices since stocks form a major proportion of households' assets. Drops in stock prices would probably lead to an additional drop in the value of the dollar.
Publication Name: The Economist (UK)
Subject: Business, international
ISSN: 0013-0613
Year: 1998
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America's bubble economy
Article Abstract:
US asset-price inflation poses a threat to the world economy that is more serious than the Japanese slump. Stock prices have risen by 65% over two years, and commercial real estate is becoming frothy. Inflation is low in terms of goods and services, but asset inflation is rampant, and real interest rates are negative in terms of asset prices. A recession could result if the bubble is burst, or it could lead to consumer price inflation. The sooner the bubble bursts, the better it will be.
Publication Name: The Economist (UK)
Subject: Business, international
ISSN: 0013-0613
Year: 1998
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