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My guess is that the answer to that is cheap debt from the fed keeping interest rates so low for so long. The stocks had value beyond what you'd expect from P/
by Enginerrrd 7y ago
My guess is that the answer to that is cheap debt from the fed keeping interest rates so low for so long. The stocks had value beyond what you'd expect from P/E ratiosand assets alone because there was added future value in the form of anticipated stock buy backs.
- JackFr 7y agoIf debt is that cheap it would be irresponsible to finance the firm with equity.
- adwn 7y ago> If debt is that cheap it would be irresponsible to finance the firm with equity. Why?
- Enginerrrd 7y agoThat really depends on your timelines and risk tolerance assessment including externalities. To use poker as an analogy: if you aren't sufficiently bankrolled, the correct play (most positive EV) can involve an unacceptably high risk of ruin. ....and BTW are you also factoring in the probability of fraud or a government seizure in your calculations?