Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:Rekenthaler: Siegel Is Right on Stock Prices Not Rated 0.0 Email Routing List Email & Route  Print Print
Thursday, September 05, 2013

Rekenthaler: Siegel Is Right on Stock Prices

News summary by MFWire's editors

Morningstar's John Rekenthaler addresses two debates, one over stock prices and the other over his analysis of the relationship between a country's corruption levels and its stock market performance.

Rekenthaler covered the Financial Times story on the debate between Robert Shiller and Jeremy Siegel. Shiller's Cape ratio shows the stock market is expensive by 100-year standards but Siegel says that the first 85 years of the data are noncomparable, arguing that they are reasonably priced by the past 15 years' standards.

Rekenthaler says he believes the Siegel side of the debate, citing two reasons Financial Times sources gave for not implementing the Cape ratio's "bearish" signal: The signal may not be bearish and may not give useful practical information.

On Rekenthaler's hypothesis on a country's corruption and its stock performance, he conceded that critics may be correct in saying his chart was flawed. Rekenthaler looked at 20-year performance and included only 21 countries, 20 of which scored low for corruption, with Italy being the exception. Therefore, the choice of countries with lower corruption only showed that lower corruption among low corruption countries paid off in stock market performance, not among all countries across the globe, Rekenthaler writes.

Rekenthaler expanded from 21 to 44 countries, adding emerging market countries with below to average corruption scores, such as Peru, India, China and Mexico and used 20-year trailing Gross Returns. Though Rekenthaler says the pattern is weaker, it is still there, with lower corruption countries performing better. Columbia, Peru and Brazil didn't fit the pattern, Rekenthaler writes.

To read more, click here.  

Edited by: Casey Quinlan


Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE

0.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Raw XML
Add to My Yahoo!
follow us in feedly




©All rights reserved to InvestmentWires, Inc. 1997-2019
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use