This is exactly what i look for as a learning material. I cant thank you enough! I have one question about stock valuation. You said valuation is liquidity and yield. When bond rallies, yield goes down, so does discount rate. Thats naturally bullish right? Then stock should go up just because of that. But you said stock ups because of liquidity. Can you share more of your thoughts on this? I must have missed something obvious.
The other explanation i can think of: cpi is high, indicating rate to remain high. (Might need to look at tips for long term rate expectation) but i assume long term rate expectation is higher, but bond rallies instead of falls. That means liquidity must be higher.
This is exactly what i look for as a learning material. I cant thank you enough! I have one question about stock valuation. You said valuation is liquidity and yield. When bond rallies, yield goes down, so does discount rate. Thats naturally bullish right? Then stock should go up just because of that. But you said stock ups because of liquidity. Can you share more of your thoughts on this? I must have missed something obvious.
I was confused too, on the same point.
The other explanation i can think of: cpi is high, indicating rate to remain high. (Might need to look at tips for long term rate expectation) but i assume long term rate expectation is higher, but bond rallies instead of falls. That means liquidity must be higher.
LOVE this stuff!!
beautifully executed!