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Living in fairyland
12 Jan 2020 (11 views)


The big tech stocks in America have an average PE ratio of 50 and a dividend yield of 1%.

This means that the current price is 2 times of a fair value for a growth stock, say PE ratio of 25 and dividend yield of 2%.

This high valuation is due to the historical low interest rate, which is negative in some countries. Investors are paying 2 times of the price to get the same dividend.

Half of the wealth in the world is ephemeral.

This will not continue for long. Look for the global stock markets to drop by 50% when the economic conditions become more "sensible".

But this may take many years to happen. In the meantime, we live in fairyland.
 


Living in fairyland
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The big tech stocks in America have an average PE ratio of 50 and a dividend yield of 1%.

This means that the current price is 2 times of a fair value for a growth stock, say PE ratio of 25 and dividend yield of 2%.

This high valuation is due to the historical low interest rate, which is negative in some countries. Investors are paying 2 times of the price to get the same dividend.

Half of the wealth in the world is ephemeral.

This will not continue for long. Look for the global stock markets to drop by 50% when the economic conditions become more "sensible".

But this may take many years to happen. In the meantime, we live in fairyland.