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Maybe I said something imprecise, but my line of thoughts is that the number of people putting money in the stock market in increasing, as well as the total amo
by ecesena 9y ago
Maybe I said something imprecise, but my line of thoughts is that the number of people putting money in the stock market in increasing, as well as the total amount of money.
If you assume the number of companies and shares is constant, then the value increases. Why some companies and not others? Maybe their ability to attract these money.
(The amount of companies/stocks isn't constant, I agree, that's why I was comparing relative growth.)
- adventured 9y ago> Why some companies and not others? Maybe their ability to attract these money. It isn't some companies, it's most of the public companies containing substantial invested capital. The S&P 500 earnings multiple has gone up ~60% since 2011. Currently near 25 times, it's at roughly the second highest non-recessionary level in US history.
- ecesena 9y agoGot it - I misinterpreted your original point and I thought you were specifically pointing to some companies. I think the rest of my argument still holds, more availability of cash = increase value. (I actually just noticed that the top comment says basically the same.)