Value Investing Professor Aswath Damodaran's One Big Worry For Stocks
Damodaran doesn't think stocks are expensive, but he doesn't think they are cheap either.
He feels there are four reasons the recent optimism is justified:
- record amounts of cash flows
- robust earnings growth
- low interest rates
- risk premiums are coming down
And he has two main worries:
- possibility of rising interest rates
- there is always another macro crisis around the corner
He is especially worried about how fast interest rates could rise if the economy starts to heat up.