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Archive of entries posted on 6th July 2016

Uncertainty works on valuation

Assets are typically valued by a multiple of their earnings. In stocks, it’s price earning ratio. In real estate, it’s cap rate. When things are moving along nicely, P/E ratios rise and cap rates fall. Asset prices rise. Nowhere are these ratios set in stone. When people feel antsy about the future, P/E ratios fall, […]