How to value stocks with all earnings at zero

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Cross-posted from FTAlphaville:

The problem in the era of coronavirus is that nearly all company earnings, without massive government intervention, are going to zero. Indiscriminately. So really, everything is overvalued ceteris paribus. Which sort of makes writing on something trading at 100 times earnings feel kind of silly.

What would help our cause, however, was if we knew where earnings might settle after we’re through the crisis. Then, perhaps, the fun could begin again.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.