A debate that has been raging across Wall Street for the past few months is the question of whether or not low bond yields justify higher stock prices. The roots of this argument are to be found in the equity risk premium and the Fed Model, two equity valuation models that rely heavily on bond yields (risk-free rate) to produce a fair value calculation for stocks. Global bond yields – Why are they Collapsing Now? Deutsche Bank’s analysts were some of the first to draw attention to the idea that stocks could go much higher if bond yields continue to…
Do Lower Interest Rates Really Justify High Equity Prices?
Sign up now and get our in-depth FREE e-books on famous investors like Klarman, Dalio, Schloss, Munger Rupert is a committed value investor and regularly writes and invests following the principles set out by Benjamin Graham. He is the editor and co-owner of Hidden Value Stocks, a quarterly investment newsletter aimed at institutional investors. Rupert owns shares in Berkshire Hathaway. Rupert holds qualifications from the Chartered Institute For Securities & Investment and the CFA Society of the UK. Rupert covers everything value investing for ValueWalk