Latest Issue

Reading the markets

The markets may not be madly high, merely reflecting the worldwide reduction of risk to capital

By RW Johnson   October 1999

The markets, everyone says, are madly high. The Dow, which in 1980 was below 800, is still well over 11,000. The FTSE 100, which surmounted 2,000 only at the beginning of the decade, is over 6,000 despite its recent fall. Yet no one believes that British production or profits have trebled since 1990-let alone that the production and profits of US industry have multiplied 13 times since 1980. The price/earnings ratio (the ratio of a share’s price to the dividend paid on that share) has just kept on rising. Quite soon, the argument runs, there has to be an almighty…

Register today to continue reading

You’ve hit your limit of three articles in the last 30 days. To get seven more, simply enter your email address below.

You’ll also receive our free e-book Prospect’s Top Thinkers 2020 and our newsletter with the best new writing on politics, economics, literature and the arts.

Prospect may process your personal information for our legitimate business purposes, to provide you with newsletters, subscription offers and other relevant information.

Click here to learn more about these purposes and how we use your data. You will be able to opt-out of further contact on the next page and in all our communications.

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

We want to hear what you think about this article. Submit a letter to

More From Prospect