165: Stephen Wright on Valuing the Stock Market Using Equity q

Stephen Wright is Professor of Economics at Birkbeck College, University of London.

Previously Professor Wright worked at the Bank of England and Cambridge University.

He is co-author of ‘Valuing Wall Street: Protecting Wealth in Turbulent Times’ – an informative book published in 2000 warning of the high values placed on stocks at that time.

In this episode we discuss his work on valuing the stock market using a variant of Tobin’s q – a valuation method put forward by the late James Tobin (Nobel Prize in Economics, 1981).

Links:

• Stephen Wright’s academic page
• Wright, S. (2004). Measures of Stock Market Value and Returns for the US Nonfinancial Corporate Sector, 1900-2002 Review of Income and Wealth, 50 (4) pp 561-584.
• Dataset for the calculation of equity q

Books:

• Valuing Wall Street: Protecting Wealth in Turbulent Times by Andrew Smithers and Stephen Wright
• Irrational Exuberance by Robert Shiller

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