PODCAST · business
Reflections on Investing
by Cornell Capital Group LLC
Drawing upon his 40 year career in both academia and investment consulting, Prof. Bradford Cornell tackles todays important investing issues from both a practical and scientific perspective. His straightforward approach will help investors or all stripes make reasoned financial decisions.www.cornell-capital.com
Episodes
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Ep65: Tesla's Fountain of Youth Revisited
The P/E for automobile manufacturers is normally very low. Ford, GM and Toyota currently trade at 7 times earnings. Tesla’s P/E of 114 is unique in the auto industry. Elon Musk’s promises of future growth from humanoid robots and robotaxis have sustained Tesla’s high price but investors should be...
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Ep64: Risk
The perception of risk has a major impact on the level of market prices and helps to explain the increase in prices over the last 15 years.
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Ep62: Government Debt and Investing
As Herb Stein “if something cannot go on forever, it will stop”. The current growth of government debt is unsustainable. How will it stop? And what does that mean for investors?
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Ep61: Stocks and Wealth Creation
A majority of stocks destroy wealth. In fact, most all of the wealth creation from stocks is attributable to only a handful companies.
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Ep59: From Earnings to Prices - P/E Multiples
The combination of P/E multiples and earnings determines stock prices – its basic math. In our last episode of Reflections on Investing we looked at earnings, now we add in the role of the multiple.
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Ep58: Earnings, the Engine of the Stock Market
The ultimate source of value for common stocks is the earnings of corporations. In the last four and a half years the S&P 500 has risen 124%. How is that increase related to earnings and what does it imply for the future of the market?
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Ep57: Risk and Return Revisited
A common refrain is that to get more return you have to bear more risk. But what exactly is risk? We revisit this important issue.
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Ep56: The Medallion Fund vs Market Efficiency
Professor and Nobel Prize winner Eugene Fama put forth the efficient market hypothesis and based on that concept Warren Buffet suggested that holding a passive investment in the S&P 500 was the best advice for most investors. If the market were efficient and if passive investing was best for...
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Ep55: Stock Prices - For Every Buyer There is a Seller
When attempting to explain movements in stock prices the media often overlook the key facts that for every buyer there is a seller and every outstanding share must be held continuously.
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Ep54: Damodaran's ERP and Future Stock Prices
The decade ending in 2023 was a great one for common stocks. Is the next decade likely to be as good? We provide an analysis using Damodaran's equity risk premium (ERP) and a framework developed by Jordan Brooks of AQR.
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Ep53: Real Interest Rates
Real Interest Rates have an immense impact on the stock market as well as the bond market. Nonetheless, they are widely misunderstood.
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Ep52: The Crash of the Bond Market
In August of 2020 Apple issued a 40 year, 2.55% bond, two years later that bond is down nearly 40%. Apple's stock on the other hand is up over 50% in that same period. Why is that and what does it imply?
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Ep51: The Apple Stock Bond Paradox
In August of 2020 Apple issued a 40 year, 2.55% bond, two years later that bond is down nearly 40%. Apple's stock on the other hand is up over 50% in that same period. Why is that and what does it imply?
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Ep50: Buy The Dips?
Is a large daily drop in the market a buying opportunity? We used 60 years of daily data to see what happens after the market drops.
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Ep49: Value Investing and Momentum
One of the most difficult problems for fundamental value investors is reconcliling value and momentum.
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Ep48: US Tech Stocks, The Big Get Biggeer
Presently just five US tech companies account for nearly 25% of the S&P 500 market cap. We discuss resurgence of big US tech and what it means for investors.
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Ep47: Back to The Future - The Automotive Industry
Prof. Bradford Cornell explains how fundamental valuation analysis can potentially uncover market inefficiencies. As an example, Prof. Cornell revisits our publication "Valuing the Automotive Business" from November 2021.
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Investor Memo Q1 2023: Banks, Interest Rates, and Debt
During the first quarter the story of both the fixed income and stock market revolved around the ongoing evolution of the yield curve.
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Ep46: Don't Forget The Debt
When interest rates were near zero it was easy for companies to borrow and for investors to overlook debt. But as interest rates increase, the amount of debt held by a business can become a significant refinancing risk for the company and investment risk for investors.
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Ep45: The Pricing Game with 0DTE Tesla Options
How can an option trade make 4000% in one day? Tesla stock has been highly volatile and one of the drivers of this volatility is the unusually large volume of options trading. Are large proportion of Tesla option contracts are traded on the day of expiration (zero DTE) and just out of the money....
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Ep44: Return of the High Fliers?
While 2020/2021 were great years for our High Fliers, in 2022 the party ended and many of those companies like Peloton, Wayfair and Carvana came crashing down. In the first month of 2023 however we are seeing signs that the worst may be over for the High Fliers. For many of these companies…
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Q4 2022 Investor Memo: Valuation Comes Home to Roost
As 2022 came to en end, investors were no longer willing to pay sky-high prices for the most speculative assets. Valuations came to the fore once again.
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Ep43: Valuing The Automotive Industry : One Year Later
We revisit "Valuing The Automotive Industry", our in depth report from last year.
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Ep42: The Howard Marks Checklist Revisited
In October of 2021 we reviewed the Howard Marks Checklist from Mr. Marks' book "Mastering the Market Cycle." Since then conditions in the market have changed dramatically so we felt it was time to revisit that Mr. Marks' checklist.
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Ep41: When Bad News is Good News for the Stock Market
The market's worst day of 2022 was September 13th when the Bureau of Labor's Consumer Price Index came in higher then expected. A month later the next CPI release was a similar surprise however the market's reaction to that news was much different. Former Goldman Sachs CEO Lloyd Blankfein…
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Ep40: Where Do We Go From Here? Valuing the S&P 500
We explain the approach to valuing the S&P 500 developed by NYU Professor Aswath Damodaran, a co-author with our senior advisor Professor Bradford Cornell, and explain its relevance to current market conditions.
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Ep39: Discount Rates and Realized Returns
There is an inverse relationship between current investment performance and expected future performance. Understanding why is a key to maximizing long-run risk adjusted returns.
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Ep38: Forecasting Returns
Building off our previous episode, we dig into the relationship between current price ratios, future expected earnings growth, and future stock market returns. It turns out there are important practical implications for investment management.
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Ep37: The Discount Rate and the Future of the Stock Market
Finance theory in recent years has stressed the importance of changes in the discount rate for explaining movements in stock prices. In this video, we describe how this works using data provided by Prof. Aswath Damodaran.
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Ep36: The "Real" Interest Rate
As Larry Summers has stressed the real interest is an important indicator of the impact of Federal Reserve policy. In this episode we take a look at real interest rates through history.
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Ep35: Inflation and Relative Prices
Relative price changes, changes in the price of one good or service relative to others, are often confused with inflation but are fundamentally different. This difference can lead to a misunderstanding of the causes of inflation. In this video, we explain the difference and what it implies for...
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Ep34: The Shiller CAPE Ratio
The Shiller CAPE Ratio is often referenced yet at times not fully understood. In this latest installment, Prof. Bradford Cornell starts at the source and breaks down this popular metric in detail.
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Ep33: Interpreting the Market P/E Ratio
From the pandemic lows of March 2020 to the end of 2021, stocks had an incredible run. Earnings were up but so too were P/E ratios. As the market climbed, many warned that valuations had become unjustifiably high. With the S&P 500 down nearly 20% , P/E ratios have returned to their historic…
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Ep32: ESG and Investment Returns
There has been an explosion of interest in ESG investing, in part because many investors believe it leads to superior investment returns. Unfortunately, that belief does not stand up to careful scrutiny as we explain in this latest episode.
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Ep31: Will Elon Musk Buy Twitter? What Does the Market Think?
Elon Musk recently proposed a buyout of Twitter at 54.20 per share. Twitter stock traded over 50 following the news but in recent weeks the stock has dwindled. What can we infer from Twitter's stock price about the possibility of Musk's completing his acquisition of Twitter?
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Ep30: The Best of Times, The Worst of Times
Recent times have been dreadful for investors especially for holders of growth and tech stocks. Many are waiting for signs of an upturn. Do a few big up days mean the carnage is over?
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Ep29: Expectations and Valuation
Growth in earnings doesn't necessarily equate to growth in a stock's price. A company's growth must meet or exceed the expectations of its investors to increase the stock price. When they fall short of these lofty expectations the results generally spell trouble for shareholders.
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Ep28: Fixed Income
Until recently fixed income has offered high risk and low return. It seems like things are beginning to change. We take another look.
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Ep27: The Crash of the High Fliers
The market's incredible performance post Covid was driven largely by growth and tech. Some of these companies were up 300, 400 even 700 perecent, companies such as Wayfair, Peloton, Zoom and Cathie Wood's ARK Invest ETF's, most notably ARKK. Unfortunately for ARK and many other tech investors…
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Ep26: Two Flavors of Volatility
We've had a lot of volatility in the market recently. What exactly is volatility and how is it measured?
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Ep25: Options, Risk and Return
For many investors options are associated with high leverage and high risk. However, options can be used to manage and reduce risk.
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Ep24: The Price Earnings (P/E) Ratio
The Price to Earnings ratio is one of the most frequently figures for comparing valuation. We explore the relationship between P/E, investor expectations and sentiment.
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Ep23: Volatility
Volatility in the market is up once again but what does that mean for your investments?
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Ep22: Breaking Down Stock Prices
We discuss how the book value, forecast value and speculative value contribute to the market price of a stock.
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Ep21: The Enterprise Value to Invested Capital Ratio
How does a company like Tesla create so much value compared to competitors like Ford and General Motors? Is Tesla doing more with less? We take a closer look at the relationship between a company's enterprise value and its invested capital.
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Ep20: Trillion Dollar Tesla
Tesla has become just the sixth company to reach a market cap of one trillion, joining tech giants Apple, Google, Microsoft, Amazon and Facebook. We compare each of these companies at the 500 billion and one trillion dollar level.
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Ep19: The Howard Marks Checklist
The market is cyclical, but what part of the cycle are we in? To better understand where we are in the market cycle we review a checklist from Oak Tree Capital founder Howard Marks.
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Ep18: Has Investing Changed?
Since the outbreak of Covid 19 a lot of things have changed. With many new retail traders and interest in the stock market, has investing changed?
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Ep17: Investment Performance Track Records Part 2
Do investment manager track records matter? It would be logical to assume that past record of success would be a good indication of future success but that isn't often the case.
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EP16: Investment Performance Track Records Part 1
Do investment manager track records matter? It would be logical to assume that past record of success would be a good indication of future success but that isn't often the case.
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ABOUT THIS SHOW
Drawing upon his 40 year career in both academia and investment consulting, Prof. Bradford Cornell tackles todays important investing issues from both a practical and scientific perspective. His straightforward approach will help investors or all stripes make reasoned financial decisions.www.cornell-capital.com
HOSTED BY
Cornell Capital Group LLC
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How many episodes does Reflections on Investing have?
Reflections on Investing currently has 64 episodes available on PodParley. New episodes are automatically indexed when they're published to the podcast feed.
What is Reflections on Investing about?
Drawing upon his 40 year career in both academia and investment consulting, Prof. Bradford Cornell tackles todays important investing issues from both a practical and scientific perspective. His straightforward approach will help investors or all stripes make reasoned financial...
How often does Reflections on Investing release new episodes?
Reflections on Investing has 64 episodes. Check the episode list to see recent publication dates and frequency.
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You can listen to Reflections on Investing on PodParley by clicking any episode. We provide an embedded audio player for direct listening, and you can also subscribe via your preferred podcast app using the RSS feed.
Who hosts Reflections on Investing?
Reflections on Investing is created and hosted by Cornell Capital Group LLC.
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