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The Recent Records on the US Stock Market – High Intrinsic Value or Just Another Bubble?

Author

Listed:
  • Dimiter Nenkov

    (University of National and World Economy, Sofia, Bulgaria)

Abstract

This paper is about the actual current prices of common stock on the US stock market, as compared with their intrinsic value. For this purpose, standardized prices, such as priceearnings ratios (PE), price-to-book ratios (PBV) and others are used, which provide the opportunity for comparison between companies, sectors and markets. In parallel with the review of actual ratios, theoretical/fundamental ratios are derived and analyzed, based on fundamentals. A historical survey is made of the actual price-earnings and price-to-book ratios on the US market, and their current levels are also discussed. The major factors determining the value of common stock are analyzed in terms of the eventual bubble on the stock market.

Suggested Citation

  • Dimiter Nenkov, 2014. "The Recent Records on the US Stock Market – High Intrinsic Value or Just Another Bubble?," Ikonomiceski i Sotsialni Alternativi, University of National and World Economy, Sofia, Bulgaria, issue 4, pages 5-16, December.
    • Handle: RePEc:nwe:iisabg:y:2014:i:4:p:5-16
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    More about this item

    Keywords

    stock market; High Intrinsic Value; bubble on the stock market;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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