Are Bull Markets Supported By Rational Growth in Stock Valuations? :: Finance Financial Economics Essays

Introduction â€Å"The rich get richer† is a frequently heard adage in the United States, a country quickly associated with capitalism. US financial markets make headline news on a daily basis, so people are well aware when the domestic stock market’s indices rise or fall. Given the widespread distribution of information on the stock market’s performance, much excitement can easily be generated during a bull market, broadly defined as a trend during which stock prices are climbing. Does the publicity and excitement surrounding a bull market further perpetuate rising stock prices? A look at historic daily closing values for the S&P 500 index from January 2, 1997 to December 31, 1999 reveals overall growth of 99.35%[i], which on average indicates similar growth in the stock prices of the companies included in the index. Clearly, this three year period falls within a bull market, since the S&P 500 is commonly utilized to represent average performance of the stock market on the whole. A return of 99.35% on an investment is excellent and far exceeds the general return on â€Å"risk-free† investments like FDIC insured savings accounts or Treasury bills. [i] Percent change calculation derived from widely published market data Examination of Common Stock Valuation to Account for Rising Share Prices Like most economic evaluations, the decision to purchase a share of a company’s stock is based on an individual’s willingness to pay versus the current selling price of the share. Fundamentally, the willingness to pay is determined by a valuation of that share of stock. For a given share of common stock, the willingness to pay is, or should be, linked to the present value of the stream of future cash flows that the investor will receive from expected dividends and through any expected capital gain for selling the share at a higher price than at which it was purchased.[i] Thus, there are three main factors the affect the valuation of a share of common stock: future dividends, future market price of the share, and the discount rate used. [i] Fundamentals of Financial Management, Eugene F. Brigham & Joel F. Houston, Harcourt College Publishers: Forth Worth, 2001. (p. 409) Future Dividends Are Bull Markets Supported By Rational Growth in Stock Valuations? :: Finance Financial Economics Essays Introduction â€Å"The rich get richer† is a frequently heard adage in the United States, a country quickly associated with capitalism. US financial markets make headline news on a daily basis, so people are well aware when the domestic stock market’s indices rise or fall. Given the widespread distribution of information on the stock market’s performance, much excitement can easily be generated during a bull market, broadly defined as a trend during which stock prices are climbing. Does the publicity and excitement surrounding a bull market further perpetuate rising stock prices? A look at historic daily closing values for the S&P 500 index from January 2, 1997 to December 31, 1999 reveals overall growth of 99.35%[i], which on average indicates similar growth in the stock prices of the companies included in the index. Clearly, this three year period falls within a bull market, since the S&P 500 is commonly utilized to represent average performance of the stock market on the whole. A return of 99.35% on an investment is excellent and far exceeds the general return on â€Å"risk-free† investments like FDIC insured savings accounts or Treasury bills. [i] Percent change calculation derived from widely published market data Examination of Common Stock Valuation to Account for Rising Share Prices Like most economic evaluations, the decision to purchase a share of a company’s stock is based on an individual’s willingness to pay versus the current selling price of the share. Fundamentally, the willingness to pay is determined by a valuation of that share of stock. For a given share of common stock, the willingness to pay is, or should be, linked to the present value of the stream of future cash flows that the investor will receive from expected dividends and through any expected capital gain for selling the share at a higher price than at which it was purchased.[i] Thus, there are three main factors the affect the valuation of a share of common stock: future dividends, future market price of the share, and the discount rate used. [i] Fundamentals of Financial Management, Eugene F. Brigham & Joel F. Houston, Harcourt College Publishers: Forth Worth, 2001. (p. 409) Future Dividends

Frank Too Big Too Ignore Essay

â€Å"Income Inequality: Too Big to Ignore† Summary Robert Frank, a professer at Cornell University, published an article for the New York Times on October 16, 2010. The title of the article was â€Å"Income Inequality: Too Big to Ignore†. In â€Å"Income Inequality: Too Big to Ignore†, Frank argues that there are differences in the social classes of the American people and that it is having a negative effect on our economy’s growth. Frank explains that middle class citizens are in a struggle to maintain a good financial position. Meanwhile, the upper class citizens are spending copious amounts of money which makes it increasingly more difficult for the middle class to meet their basic needs. He says that the middle class are looking toward upper class citizens, comparing their posesions as well as their financial positions which makes the middle class feel financially unstable. Frank explains that the income gap between the classes are causing distress on marriages of American citizens. He states that divorce rates rise when people are in financial distress. in conjunction with finincial uneasyness, Frank explains that the willingness to ignore infrastructure is an effect as well as the relocation of lower class families to places that are further away from their places of employment. Frank concludes by how the income gap is not only unfair, but that it would be unwise to continue on the current path of income inequality. Connections Frank has a very bleak view of the economic status of America in which he shares with Herbert. One of the main evidence’s of this point is the comparison of Frank’s quote in which he states â€Å"By contrast, during the last three decades, the economy has grown much more slowly, and our infrastructure has fallen into grave disrepair.† (580) with Herbert’s quote â€Å"It will likely take many years, perhaps a decade or more, to get employment back to a level at which one could fairly say the economy is thriving.† (564) In comparison between Frank and Thomas, each author believes that there is something wrong with the system and that the American people need to do something about it. This can be justified within Thomas’ and Frank’s articles. Frank states â€Å"No one dares to argue that rising inequality is required in the name of fairness. So maybe we should just agree that it’s a bad thing – and try to do something about it.†(584). Thomas explains â€Å"We must also understand what got us here and the path that leads upward.† (570) Frank can also agree with Brandon King in the fact that America is still repairable. King states â€Å"If the Great Recession has taught us anything, it is that planning for the future by saving more and enacting policies that sustain economic growth are what will keep the American Dream alive.† In comparison, Frank believes that we need to consult the problem in order to repair it.

Analysis Of Guy De Maupassant s `` The Necklace ``

Guy De Maupassant s, The Necklace, is a short story about Mathilde Loisel, a middle-class wife, who is dissatisfied with her life and believes that she was meant to live as an upper-class woman. When invited to her husband s ball, she manipulates her way into getting a new dress and borrows her friend s diamond necklace. After the ball, she discovers the necklace is gone. Both Malthilde and her husband delay returning the lost necklace, and secretly buy a replica. They both struggle ten years of hardship to pay off the debt, only to reveal that the lost diamond necklace was not but costume jewelry. The short story contains many literary elements that helped give the story a deeper meaning and complexity. During the late 19th century, most of French society lived in a particular class structure. People, who lived below upper-class, believed that happiness was only attainable if there was money to go about. They held high admiration for materials, and that often left them dissatisfied with their lives. Research states that, â€Å"This is the world of the Parisian lower middle class, but could well serve as an allegory...where ambition, materialism, greed, and petty meanness are the main dynamic† (Kleine-Ahlbrandt no page). Guy De Maupassant s The Necklace portrays the Parisian class structure very well through the character of Mathilde Loisel, a woman who wished for materials only the upper-class could afford. One literary element that was used in the short story, TheShow MoreRelatedAnalysis Of Guy De Maupassant s `` The Necklace ``1681 Words   |  7 Pagessaid greed is the root of all evil was right. This is shown through irony in Guy De Maupassant’s short story, â€Å"The Necklace† in the fate of the main character Madame Mathilde Loisel and also her husband, Monsieur Loisel. The story about Madame Loisel reveals the effects excessive jealousy, ungratefulness, pride and greed have on the life of not only herself, but also her husband. Many critics have read â€Å"The Necklace† as a Cinderella tale in reverse. Like Cinderella, Madame Loisel lives a commonRead MoreAnalysis Of Guy De Maupassant s `` The Necklace `` Essay1463 Words   |  6 Pages Guy de Maupassant, a French writer, was born in August 1850 and died in July 1893, during which the Franco-Prussian war took place. Subsequently, many of his narrations were set during this war to describe its meaningless and disastrous aftermath to countless innocent people whose experiences were changed forever. He was known as a master of short stories and belonged to naturalist school of writers, in which he described human lives, along with society, in disillusioned and often pessimistic termsRead MoreAnalysis Of Guy De Maupassant The Necklace And Nikolai Gogol s The Overcoat1788 Words   |  8 Pageswhich it is produced and consumed, and this explains the incorporation of moral and ethical dilemmas in Guy de Maupassant’s â€Å"The Necklace† a nd Nikolai Gogol’s â€Å"The Overcoat†. The fact that the two stories are generally different is unchallengeable. However, a close scrutiny of character development reveals similar and different portrayals of moral and ethical dilemmas. In the context of this analysis, moral or ethical dilemmas are situations in which people must struggle with the â€Å"should or should not†Read MoreAnalysis Of The Necklace1358 Words   |  6 Pages â€Å"The Necklace† Analysis Plot Analysis - The plot analysis of (Exposition) â€Å"The Necklace† by Guy de Maupassant, take place in the late 1800s when Mathilde Loisel and her husband decides to go to a ball. The importance of the place is so you can fully appreciate how royal Mathilde is supposed to be at the ball, and let me tell you, she pulls it off. She was the most beautiful woman there, but surprisingly it wasn t the necklace that made her shine that night. She alreadyRead MoreFeminism In The Necklace1068 Words   |  5 PagesFeminist Analysis of Guy de Maupassant’s The Necklace. In recent decades, feminism has attracted attention from different individuals who fight for equal treatment of both genders. As defined by many researchers, feminism is the advocacy of equality between male and females. This concept began when people realized that the traditional roles of men and women provide a lot of injustice to women. According to Barry â€Å"The women’s movement’ of the 1960s was not, of course, the start of feminism. RatherRead MoreIrony in the Works of Kate Chopin and Guy De Maupassant1903 Words   |  8 Pagesirony as the cause of death Paragraph 5: The Necklace summary/analysis Paragraph 6: conflict and irony Paragraph 7: result of ironic twist Conclusion: Irony in Chopin and Maupassant Irony is a literary device wherein what the reader expects to occur does not and the events that transpire are wholly surprising. Authors throughout literary history have used this devise to surprise and entertain the reader. Kate Chopin and Guy de Maupassant both utilize irony in their respective short storiesRead MoreEssay about Country Lovers versus The Necklace886 Words   |  4 PagesIt is amazing how two short stories can be so similar but yet so different even when it comes to marriage and gender roles. These particular literary works involve creative writing between the two stories that are being referred to would be The Necklace and Country Lovers. Both these stories are set in different places and keep the readers wondering throughout the story what the ending result is. And to even consider writing a literature that centers on this topic is truly fascinating and attention-grabbingRead MoreFiction in Henry James Paste2797 Words   |  12 PagesFiction in Henry James`s â€Å"Paste† Table of Contents 1. Introduction 3 2. American Modernism 4 3. Henry James (1843-1916) 5 4. Paste 8 5. Fiction in Henry James 10 6. Paste analysis 12 6. Conclusion 14 7. Bibliography 15 1. Introduction In my term paper I will primarily discuss Henry James and his short story Paste. Firstly, I will focus on the time he wrote the story and than I will describe his life and his three major writing phrases. Next, I will go on with giving the most importantRead More The Complex Character of Mathilde Loisel in The Necklace Essay1144 Words   |  5 PagesThe Complex Character of Mathilde Loisel in The Necklace  Ã‚  Ã‚   The development of a character on paper is key to being able to create that character on stage. The development of character on paper is also key to understanding it in our imaginations. I read and understand stories and novels much the same way that I read a play script†¦through character analysis. I believe that understanding characters in a short story, or any form of fiction for that matter, is essential to many reader’s abilitiesRead MoreNineteenth Century Gender Roles Exposed in The Necklace and The Story of an Hour2020 Words   |  9 Pagesmoney. Most men thought women were so fragile that they could not run their own lives. Women may not have liked it but they were forced to live this way The men were the head of the household and made all the decisions. The representation of The Necklace and The story of an hour represents gender roles as defined by the nineteenth century society guidelines . The The Story of an Hour was set in the late nineteenth century in the home of Louise Mallard.(Kate Chopin).It was written on April