High growth need not translate one-for-one into higher return unless it can be expected to continue forever. Declining return on investment essentially means that either GDP growth slows or profits decline as a share of GDP, or both. And, of course, valuation multiples do matter.
Denis Dikarevhas quoted2 years ago
he economy, Sk (earnings/GDP), and the P/E ratio (PE).
Denis Dikarevhas quoted2 years ago
We can express the aggregate market value of equity, Ve, as the product of three factors: the level of nominal GDP, the share of profits in the economy, Sk (earnings/GDP)
Denis Dikarevhas quoted2 years ago
Although higher-frequency data improve the precision of sample variances, covariances, and correlations, they do not improve the precision of the sample mean.
Denis Dikarevhas quoted2 years ago
Availability bias, a cognitive error, is an information-processing bias. Individuals exhibiting this bias will assess the likelihood of an outcome based on how easily they can recall the information.
Denis Dikarevhas quoted2 years ago
The six emotional biases discussed are loss aversion, overconfidence, self-control, status quo, endowment, and regret aversion.