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Buffett's measure - the percentage of total market cap (TMC) relative to the U.S. GNP crossed 100% last week into stretched territory for the first time since 2007 which implies a mere return of around 3.3% annualized (including dividends) over the following years. [This post presents the components of the ratio and the conclusions drawn.]
Read More »U.S. Debt 101: If the U.S. Were A Stock Few Investors Would Own It – Here’s Why (+2K Views)
There has been a lot of media coverage about the United States' debt issue these days. Why should we care? Because as U.S. citizens, we all own stock in this "company" called the United States of America (let's say the ticker symbol is USA). We purchased this stock through the various taxes we pay every year (income tax, payroll tax, corporate tax) and we receive dividends through the various benefits we receive every year (security provided by defense budget, Medicare/Medicaid benefits, Social Security benefits, etc.). This article attempts to explain the U.S. national debt in simple layman's terms by analyzing the United States and its debt issue as if it were a stock investment. Words: 1929; Charts: 5; Tables: 1
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