Comment, question or quotation of the day

22-07-2019 : Quote of the day

“There are two superpowers in the world today in my opinion. There's the United States and there's Moodys Bond Rating Services. The United States can destroy you by dropping bombs, and Moody's can destroy you by dowgrading your bonds. And believe me, it's not clear sometimes who's more powerful.”     Thomas Friedman

19-07-2019 : Question from a follower of the Facebook page

While the European equity index, with dividends reinvested, has risen by 19.4% since the beginning of the year, the real estate company index has risen by only 13.7%. Is this not a sign that these are undervalued?   No, not at all. In a bull market, it is normal for property company prices to rise at a slower rate because of their lower beta than the one of the market. The unlevered beta of real estate companies is 0.42 (as your Vernimmen reminds you in Chapter 29), compared to 0.79 for the entire market. However, the level of debt of these companies, which is certainly higher than that of the market as a whole, is not such that it can more than compensate for this low unlevered beta and make them more volatile than the market.   Have a nice day.


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The Letter

Number 120 of April 2019

News : Finance: green, sustainable and responsible? (2/2)

Statistics : French government bond yields since . . . 1752

Research : Spectacular deleveraging

Q&A : Can a growth rate to perpetuity be negative?

COMMENTS : Comments posted on Facebook