If you’re looking for signs of a top, the choices are beguiling. There are seven-year-olds trading ETFs, the Australian Financial Review is telling its readers how to launch their own crypto, pet-rock non-fungible tokens are selling for more than $US100,000 and the new bloods at ASIC are “going to be litigating as much as we possibly can” because the problems in financial services are “breathtaking”. If that weren’t enough, ABBA has a new album out.
Before you pull on the spandex to the tune of Dancing Queen, let’s look at the real world of share prices. Before the pandemic, it was possible to examine high-growth companies and see how current valuations might be reasonable in two years or so. Now it’s four or more. Price-to-sales ratios are common currency, as are double-figure daily share price moves. And many stocks look expensive on just about every measure.
How did this happen? As Adam Tooze writes in Shutdown: How Covid Shook the World’s Economy, “in a crisis like the one that hit the world in March 2020, only one thing will restore confidence: limitless cash”. The cash duly came and the confidence followed. Now it’s overflowing.
The recent reporting season was spectacular. After rising 16% in 2020, the S&P 500 in the US is up about 25% year to date with the S&P/ASX 200 down 2% last year and up about 10% so far this year. Those waiting for the pullback have been disappointed.
This story is from the December 2021 - January 2022 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the December 2021 - January 2022 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
Is the public market shrinking?
Australia needs a healthy stock market to give companies access to funds and to allow retail investors to build wealth.
India: three steps to transformation
Massive investment and extensive reforms turbocharge the economy.
The ballet of business
Changing direction, products, models and marketing is a hard task for a business. We chart what it takes to turn a business around, plus profile four successful pivots.
Save money and the planet
Could the high cost of living give us the incentive we need to reduce how much water and energy we use or waste? These eco-friendly household tips will help you do just that.
AI adoption is the new black
Artificial intelligence is set to reshape the commercial world, and small enterprises can’t afford to miss the boat.
Spam attack! Murky laws jam our inboxes
Unwanted marketing material is one of the pain points of modern life.
From rags to riches in style
Rich Tran sported a bowl cut until he was 14 years old and had no intention of becoming a hairdresser.
New work deals are killing the 'old' office
The Covid pandemic and the subsequent lockdowns accelerated the trend to more people working from home. It was a mixed experience.
Points taken: the truth about rewards
Can hopping between credit cards really boost your frequent flyer haul and give you cheap or free travel - or is it doing more harm than good behind the scenes? Money puts it to the test.
Shortcuts to own a home
Innovative ideas with a focus on low costs and sustainability could help solve the housing crunch.
