Dissecting Stock Returns: Financial Engineering or Genuine Growth?

Dissecting Stock Returns: Financial Engineering or Genuine Growth?

Do the impressive returns in public and private markets stem from strategic financial engineering or reflect actual economic growth?

  • How corporate profit growth is linked to economic growth, even though corporate profits are more volatile
  • How interest rates, tax rates, and stock buybacks influence corporate profits and stock returns
  • Why there are fewer publicly traded stocks
  • How the increase in leveraged buyouts has impacted the economy
  • How private equity funds use financial engineering to boost returns


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Show Notes

US CEOs start to contemplate Trump, round 2 by Rana Foroohar—The Financial Times

End of an Era: The Coming Long-Run Slowdown in Corporate Profit Growth and Stock Returns by Michael Smolyansky—The Federal Reserve

10-Year Stock Market Returns—Crestmont Research

Stock Average—Crestmont Research

Stock EPS Reality—Crestmont Research

What Matters More for Emerging Markets Investors: Economic Growth or EPS Growth? by Jason Hsu Jay Ritter Phillip Wool Yanxiang Zhao—Portfolio Management Research

Nominal Gross Domestic Product for United States—FRED Economic Data

The Secretive Industry Devouring the U.S. Economy by Rogé Karma—The Atlantic

Key Drivers Behind Widespread Adoption Of NAV Financing by Matthew K Kerfoot—Proskauer

The Inevitable Rise of NAV Financing by Patricia Teixeira and Anastasia Kaup—Ropes & Gray

HAVE EXCHANGE-LISTED FIRMS BECOME LESS IMPORTANT FOR THE ECONOMY? by Frederik P. Schlingemann and René M. Stulz—NBER

LBOs Make (More) Companies Go Bankrupt, Research Shows by Alicia McElhaney—Institutional Investor

Leveraged buyouts and financial distress by Brian Ayash and Mahdi Rastad—ScienceDirect


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