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Opinion | Stock prices: Crazy or justified? | Israel today


The capital market is dominated by speculators, by a public that as usual seeks the winning investment • But these investments are known only in retrospect

Shares of Berkshire Hathaway have soared more than 23 percent in the past year, but that did not stop Charlie Menger, Warren Buffett's deputy, from saying at a meeting of the company's shareholders yesterday that "stock prices are now insane, as they were before the crisis." .

According to him, although the share prices were higher then, but even now the situation is very problematic and companies are priced 35 times their level of earnings.

Menger is an attraction for investors and the media.

He is a billionaire, a philanthropist, with a very broad vision, and at 97 he has seen a lot in his life.

In the capital market, on the other hand, the companies' reports are presented and show that the jump in their profits is quite similar to the jump in stock prices, so they believe the market will continue to rise in the short term.

Unemployment data also show a positive trend of a decrease in the unemployment rate, but attention should be paid to the supplementary figure - the employment rate.

Before the plague it stood at about 64% and now it stands at 6.18%.

In practice, this is 2.1% of workers who can be added to the unemployment rate - whether they stay at home because that is what they choose to do, or whether they want to work and do not find a suitable job.

In both cases, the fact that they are not in the job market impairs growth.

Wall Street investment executives are very happy with the crash of Bitcoin and cryptocurrencies in general.

Any investment alternative that declines in its attractiveness - adds to them.

The great volatility that this market is discovering certainly does not help it to occupy the place it desires.

Nor to Salvador, which adopted it as a legal means of payment.

The fact is that it is dominated by speculators, by a public that as usual seeks the winning investment, but these investments are known only in retrospect.

Were we wrong?


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Source: israelhayom

All news articles on 2021-12-04

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