Absolute Return Partners examines whether the powerful 2012 to 2013 equity rally reflects a genuine market bubble or a normal phase of the investment cycle. Despite widespread bubble fears, the paper argues investor skepticism, selective positioning, and global valuations suggest a more nuanced picture.
Squeaky Bum Time
Absolute Return Partners
Niels Jensen, Gerard Ifill-Williams
Research
14 Pages
Key Takeaways
U.S. Valuation Gap: Four valuation measures indicate U.S. equities were significantly overvalued, though still below the extremes reached during the 2000 market peak.
Buyback Driven Earnings: U.S. companies spent roughly $1 trillion annually on share buybacks, supporting per share earnings even as underlying profit growth remained relatively weak.
U.S. companies spent roughly $1 trillion annually on share buybacks, supporting per share earnings even as underlying profit growth remained relatively weak. Labor's share of U.S. national income declined from about 65% to just under 60%, potentially creating future pressure on corporate profit margins.
Join our newsletter to have all of this content + Exclusive Newsletter Bonus Content delivered to your inbox every week
