Stocks do not hedge against inflation
Started by Riversider
about 15 years ago
Posts: 13573
Member since: Apr 2009
Discussion about
http://www.ft.com/cms/s/3/b62c8cf0-5ecd-11e0-8e7d-00144feab49a.html#axzz1IX5GnMcQ Great piece in the FT debunking the myth that stocks are an effective inflation hedge. They discuss companies depreciating assets at cost only to find the replacement cost has gone up. They also discuss underlying earnings not telling the true story of company performance finding out that free cash flow generaetd by the business fails to keep up.