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Article: Looking for directions; Investment banking.(The value of Wall Street)
- Article from:
- The Economist (US)
- Article date:
- June 25, 2005
CopyrightCOPYRIGHT 2005 Economist Newspaper Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Wall Street's titans complain that the stockmarket doesn't understand their business. Given the latest results, that's no wonder
YOU might expect that the stockmarket would, if it understood no other industry, be able to fathom investment banking. Yet the heads of Wall Street's biggest firms are no different from the bosses of companies the world over, in complaining that the market consistently undervalues their shares. The Wall Streeters may have a point. Investment banks trade at below 11 times past earnings, a third less than the average listed company. And that is despite pre-tax profit margins that even in 2002, at the depth of the bear market, never dipped ...