The businesses are hoping to cash in on a surge in the equity valuations of retailers amid hopes of a recovery in the consumer economy and investors' new supply of cash from multimillion pound payouts from the likes of Vodafone.
It's true that the equity valuations of the telecom services stocks are beaten up, like Worldcom and AT&T.
The closely related topic of the impact of equity valuation on credit supply to the real economy is, e.g., discussed inBoucinha et al. (2017).
Mr Shiller follows the advice of Benjamin Graham, the godfather of classical equity valuation, in favouring, for the purposes of this calculation, a trailing ten-year moving average for earnings, since the underlying trend is what matters.
BHP Billiton was 55.5p better at £18.72 as Barclays Capital raised its target price from £27 to £29: We expect a significant rerating of BHP's equity valuation over the next year.
Someone who believes that measures of equity valuation — price/earnings ratios or dividend yields, to name but two — will revert back to their long-term historical means.
The index that Fisher has been watching most closely is the MXWD the MSCI AC World Index, perhaps the broadest measure of equity valuations on the planet.
Indeed the very low level of the Treasury bond yields and the fairly high level of US equity valuations tells us much the same thing.
Money in, money out Hurdle rates Med sea bubble Darned interest Spanish practices Surprise, surprise ReprintsAll this explains why the markets reacted so badly to hints on October 14th by Alan Greenspan, chairman of the Federal Reserve, that equity valuations were looking increasingly risky.
The impact of fund inflows on private equity valuation," a study by Paul Gompers of Harvard Business School and Josh Lerner from the National Bureau of Economic Research, concludes that larger than normal capital inflows raise prices paid for companies bought out.
