The Stock Value Wasn't Decided by Economic Conditions
The stock mark jump 6% last week on growing hopes of an imminent economic recovery. It has risen 39% from the March lows on similar hopes. Of course, it had previously fallen nearly 60% on fears of a slump.
All these moves have on thing in common: Millions of investors have acted on the belief that shared values are closely related to what will happen in the economy in the next few months and years, But are they right?
Not according to Ben inker, director of asset allocation at contrarian fund company Grantham Mayo Van Otterloo & Co. In a recent and fascinating note, Mr. Inker persuasively argues that the next moves in the economy shouldn't actually matter too much to investors at all.
反向投资基金公司 Grantham Mayo Van Otterloo & Co.的资产配置主管本·印克可不这样认为。在最近一份颇有趣的报告中，印克很有说服力地辩称道，投资者实际上不应该过于看重近期的经济走势。
Why? Two reasons.
First, because most of the value of shares really depends on the cash they will generate many years, even decades, ahead. The next few years are only a minuscule part of the equation. "Since stocks do not have an expiration date and dividends grow over time," Mr. Inker argues, "the duration of stocks is extremely long. If we assume that half of the return from stocks in a given year comes from the dividends and half from the growth in dividends, most of the value of stocks comes from cash flows in the distant future."
How distant? Using Mr. Inker's hypothesis, it turns out that about 75% of the value of shares is actually based on dividends that will be paid more than eleven years from now. Half the value is based on dividends to be paid after 25 years, and a quarter on those to be paid after about 50 years.
In other words, when you look at the market today, three quarters of its true value is based on what companies will earn and pay out after 2020 and half is based on what they will do after 2034. So really, how much attention should you pay to next quarter's earnings?
There is a second reason for not paying too much attention to the economy's next move. No matter what happens next month or next year, sooner or later the economy will probably find its way back onto its long-term path anyway. If we now boom wildly, we'll pay for it with weaker growth down the line And if things are bad for a while, eventually they'll pick Up. That can be true even for devastating blows. GMO's calculations show that by the late 1940s, Mr. Inker writes, the U.S. economy had returned to the long-term growth paths if the Depression had never happened."
不要对短期的经济走势关注过多，这是第二个原因。无论下个月或是明年发生什么事，经济或许早晚都会重新回到长期的发展道路上去。如果现在经济疯狂增长，那么代价就是今后增幅会减小。如果一段时期形势不好，最终总会好起来的。即使是对灾难性的打击也是这样。印克写道，据 Grantham Mayo Van Otterloo & Co.计算，到20世纪40年代末，美国经济已经回到了长期的增长道路上，就像大萧条从来没有发生过一样。
This sort of analysis is a useful antidote to stock market moods.
Wall Street is back on its happy pills again. At some point, maybe even soon, brokers may start urging us to pay too much for stocks on the basis of this year's economic growth or next. Canny investors may respond: But what about 2034?