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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Bridge Player who wrote (53009)	6/4/2000 2:39:00 PM
From: UnBelievable	Read Replies (1) \| Respond to of 99985

At What Rate Does a Market Really Grow? "One of their more compelling points is based on the fact that corporate America's average annual return on equity over the last 50 years has been 11.9 percent, nearly three percentage points lower than the stock market's average return over that period." "If the market's expected return is greater than a company's return on equity, the rational thing for the company to do is close up shop and invest its assets in the stock market. Alert balance sheet readers will note that, because the market's expected return is also the rate at which a company's future income stream is discounted for valuation purposes, the present value of such a company's future earnings would be negative." nytimes.com