The New Year of 1897 had just passed, but the shopping spree was not over. The shops on Fifth Avenue in Manhattan are bustling with people, frantically buying all sorts of goods as if they were all free. Every department store was packed, and the owners of the department stores were so happy that they couldn't close their mouths all day, and the employees were almost exhausted.

In the past few months, for many people, it has been a golden day, and the money has come very easily, it is like a rain of gold coins in the sky.

Since the second half of last year, the stock market has been booming, the surge in the Dow Jones index that has just appeared clearly shows the prosperity of the stock market, many stocks in just a few months, the price has risen several times, some industries, such as railways, such as shipping, the average price-earnings ratio of their stocks is more than 70, which also means that if the current state of profitability of these industries, then the person who bought his shares will need to wait 70 years for the profit to equal the cost. Under normal circumstances, a stock's P/E ratio should be in the range of 14-20, and more than 28 means that there is a bubble.

Generally speaking, if a stock has a high P/E ratio, there are several possibilities:

The first scenario is when the market predicts that its earnings will grow rapidly in the future. For example, if a company suddenly succeeds in developing a fusion reactor that can be used commercially, even if it has invested too much in scientific research this year, has very little profit and a high price-to-earnings ratio, it will be sought after by the market considering the epoch-making significance of this technology and its huge profit prospects.

The second scenario is that the company has always been profitable, but there were some special expenses in the previous year, which reduced the profitability. But from the perspective of future prospects, the company's earnings prospects are still positive, so such a P/E ratio can also be very reasonable.

The third scenario is that there is a bubble in the industry and the stock is sought after. To put it more clearly, it is to be stupid.

Today, the profitability of these industries themselves is not in a state of continuous growth, although the so-called "good news" is one after another, but these news are just news. This is like if now, China has discovered a large nickel ore at a depth of 40,000 meters underground, is it good news for the steel industry? Maybe, but in the foreseeable short term, there is no use for eggs, because the depth is too high, and the technical difficulty and economic cost of mining are too high, so there is basically no point in mining.

And what about the earnings prospects for these industries? At least for now, there is no big prospect of making so much money. This is because the demand for rail and shipping has not risen significantly. So this kind of crazy growth of prices is completely a bubble and a fool.

It's just that many people don't have enough time and knowledge to join the stock market, so various trust companies have also developed rapidly in the past few months, and trust and investment companies enjoyed many businesses that banks could not operate at that time, and government supervision was very lax. Although the operators of these companies know that most of the current stock market is a bubble, under today's conditions, if any trust and investment company does not invest most of its funds in the stock market, it means that their rate of return will be far lower than that of other companies in the same industry, which means that his customers will not hesitate to abandon them and turn to the arms of other trust and investment companies that are willing to invest in the stock market.

"Uncle Joshua, you see, the stock market in the United States has been quite abnormal for a while. The stock market has strayed from its value, and our banks are still open to lending to trust companies. Isn't that too dangerous? Joshua Rothschild's nephew, Alberto, asked with a report.

"Oh, it's just another round of harvesting." Joshua replied with a smile.

"Alberto, look, what are Morgan's banks doing and MacDonald's? And who started so much of the so-called good news? Who controls public opinion in this country? Also, in the early days of the pandemic, which institutions gave good information? ”

"You're saying that they made this qiē single-handedly? So what is their purpose? Alberto asked.

Joshua smiled and said, "My child, you should know that even when the bubble is at its highest, there is beer underneath the foam, but when the price is high, some fools will take all the foam for beer, and when the market crashes, they will treat the beer as if it were all foam." So, if you're careful, you'll be able to buy real beer at the price of a bubble after the market crashes. This is also an old trick, there is something I don't understand. Since they have prepared such a feast, how can we be worthy of them if we don't eat two bites with us? Of course, we also have to be cautious, because we are likely to be among the targets of their attacks. You know because of the joint offset of the U.S. banks. It is difficult for us to enter the banking circle in the United States, so over the years, we have invested a lot of strength in trust and investment companies, and mastered a lot of trust and investment companies. And in their eyes, this is simply a thorn in the flesh. They have been trying to bring down all these trust and investment companies. Nowadays, the stock market bubble is high, and it is impossible for those trust companies not to invest in it. Once they are put in, as long as Morgan and MacDonald, who control the banks, stop making loans and start recovering them quickly, the entire stock market will soon collapse, and these trust companies will have no choice but to go bankrupt. ”

Alberto thought for a moment and asked, "Uncle, isn't this a good opportunity?" Our family has not been able to return to North America on a large scale, and now if we step in and protect some important trust companies while they recover their loans, or even take the opportunity to swallow up other businesses, then we can re-establish ourselves in the United States. Uncle, do you think this idea is feasible? ”

Joshua thought for a moment and replied, "Alberto, it's very good that you can think of this. But you have to know that there are very large numbers of money involved. It's not something like that for me to decide. This must be decided by the whole family. And what kind of decision the family will make, it's not for me to be sure. However, I am sure that if you want your family to support your idea, you must concretize that idea into a comprehensive and concrete quantitative analysis and a practical implementation plan. It's a big job, and there's not much time left for you. Can you complete such a report in a short period of time? ”

Hearing this, Alberto was a little excited, but he still tried to calm himself down, and then asked, "Uncle Joshua, won't you help me in this matter?" ”

"Ah, kid, I still have my own business, so you'll have to take care of it. What do you think. Can I see this report in a week? ”

Alberto thought for a moment and replied, "Uncle Joshua, it's a bit difficult, but if you give me some investigative authority and allow me to pick a few helpers, in a week's time, I'll be able to complete this plan." ”

"I can agree with that." Joshua said, "Determine who you need, and then I will match them up." ”

"Thank you, Uncle Joshua. I'm going to prepare. Alberto couldn't contain his excitement a little, he was finally able to preside over the heavy dà.

"Okay. Go down. Joshua said.

Looking at his nephew's excited look as he left, Joshua smiled and shook his head. He knew that the assignment he had given Alberto was purely a workout. The likelihood that the family would approve such a building is very, very small, because it is now in South Africa at a time of tension when war clouds are thick. South African gold is too important for the family's business. Therefore, the main attention and strength of the family should be put over there, and it is difficult to invest such a large force in North America at this time. In fact, perhaps it was because they saw through this that MacDonald and Morgan would play such a trick at this time. Therefore, the most realistic thing to do now is to quietly withdraw their own money before Scrooge MacDonald and JP Morgan start to withdraw money from the market.

Joshua thought this when he suddenly heard a soft knock on the door.

"Who, what's the matter?" Joshua asked.

"Mr. Rothschild, today's newspaper is here." A man outside the door replied.

"Okay, you can send it in." Joshua heard that it was his servant John.

The door was gently pushed open, and John walked in, placed a few newspapers neatly on Joshua's desk, and said to Joshua very respectfully, "Mr. Rothschild, today's newspapers are here." ”

"Okay, you can go about your business." Joshua waved his hand softly, and John withdrew silently and closed the door.

Joshua opened the drawer and pulled out his glasses and put them on the bridge of his nose - he was not young anymore, and his eyes were still very old. Then he picked up a newspaper that was placed on top.

It was the Wall Street Journal, the most authoritative newspaper in the United States in terms of financial expertise. John was very careful in his work, so he always put this newspaper at the top.

Joshua picked up the newspaper and saw that on its front page, there was an article like this: "The shortcomings and needs of our banking system." R1058