The stock market crash - and after

Bibliographic data

Monograph

Identifikator:: 1815583320

URN:: urn:nbn:de:zbw-retromon-204544

Document type:: Monograph

Author:: Fisher, Irving http://d-nb.info/gnd/118533541

Title:: The stock market crash - and after

Place of publication:: New York

Publisher:: Macmillan

Year of publication:: 1930

Scope:: XXVI, 286 S.; graph. Darst

Digitisation:: 2022

Collection:: Economics Books

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Chapter III. Causes of the Panic

Collection:: Economics Books

Causes of the Panic 35 prices necessarily brought a huge increase in the earn- ings of common shares, and this naturally forced a valorization of these shares in terms of something like a 57-cent dollar. “On the basis of this higher price level, stocks, through, say, the 1919-1924 period, were, as now seems clear, seriously undervalued. As soon as pub- lic confidence in the rate of earnings was established, there began a movement of revalorization that natu- rally swung to wild extremes, as stock markets always do. With this came a recurrence of the familiar ‘new era’ theory, which seems to blossom about once in a generation with unfailing regularity. All this brought what appears to have been as serious an overvaluation of common stocks as they had pre- viously been undervalued—overvalued, I should say, because it is clear that we have as yet seen no-read- justment of long-term interest rates and bond yields to what look like permanently lower levels. And would not this be inevitable if the high prices attained by the average of stocks were to continue?” It is not clear why long-term interest rates and bond yields should seek “permanently lower levels” —they might properly remain at permanently higher levels, if, because of increases in science and the arts, the “tempo” of business justifies expectation of higher profits and greater real income. But it seems measurably true that common stocks were over- valued precedent to the crash, and that this over- valuation was one of its immediate factors. There is a measure of truth, also, in the judgment pro-

Access restriction

Copyright

fullscreen: The stock market crash - and after

Monograph

Chapter

Table of contents

Download

Monograph

Chapter

This page

Image fragment

Citation links

Citation recommendation