The New Year of 1897 just passed, but the shopping carnival was not over. The shops on Fifth Avenue in Manhattan were bustling with crowds of people, and people were frantically buying all kinds of goods, as if all of them were free. Every department store was crowded with people, and the bosses of the department store were so happy that they couldn't close their mouths all day, while the employees were almost exhausted.

Over the past few months, for many people, it has been a golden day, and money has come particularly easily, just like raining gold coins in the sky.

Since the second half of last year, the stock market has been booming. The just-appeared Dow Jones Index clearly shows the boom in the stock market. Many stocks have risen several times in just a few months. In some industries, such as railways and shipping, the average price-to-earnings ratio of their stocks has exceeded 70. This also means that if the current profit status of these industries is based on the current profitability of these industries, then those who buy their stocks will have to wait 70 years to make profits equal to the cost. Under normal circumstances, the price-to-earnings ratio of a stock should be in the range of 14-20, and exceeding 28 means a bubble.

Generally speaking, if a certain stock has a higher price-to-earnings ratio, there are often several possibilities:

The first situation is that the market predicts that its future profits will grow rapidly. For example, if a company suddenly successfully develops a commercially available fusion reactor, even if it makes little profit and a very high price-to-earnings ratio this year due to its large investment in scientific research this year, considering the epoch-making significance of this technology and its huge profit prospects, this kind of stock will be sought after by the market.

The second situation is that the company has always been profitable, but some special expenditures occurred in the previous year, which reduced the profit. However, from the future prospects, the company's profit prospects are still optimistic, so such a price-to-earnings ratio can also be very reasonable.

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

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

What about the profit prospects of these industries? At least for now, there is no big prospect of making so much money. Because the demand for railways and shipping in the market has not increased significantly. Therefore, this kind of crazy price growth is completely a bubble and a fool.

However, many people do not have enough time and knowledge to join the stock market, so various trust companies have developed rapidly in the past few months. Trust investment companies enjoyed many businesses that banks could not operate, and government supervision was very relaxed. All this led to trust investment companies over-absorbing social funds and investing in high-risk industries and stock markets. Although the operators of these companies know that most of the stock markets are bubbles now, under today's conditions, if any trust investment company does not invest most of its funds into the stock market, it means that their yields will be far lower than other companies in the same industry, which means that their customers will abandon them without hesitation and turn to the arms of other trust investment companies willing to invest in the stock market.

"Uncle Joshua, look at it. Over the past period of time, the U.S. stock market has deviated from its value seriously, and our banks are still providing loans to those trust companies. Is this too dangerous?" Alberto, the nephew of Joshua Rothschild, asked with a statement.

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

"Alberto, look, what are Morgan's banks and McDonald's banks doing? And who caused so much so-called positive news hype? Who controls the public opinion in this country? And, in the early stages of the tide, which institutions gave positive information?"

"You mean, they made all this? Then 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 under the bubble. However, when the price rises, some fools will regard all the bubbles as beer, and when the market collapses, they will regard beer as bubbles completely. So, if you pay attention, you can buy real beer at the price of buying bubbles after the market collapses. This is also an old trick, and there is something I don't understand. Since they have prepared such a banquet, how can we be worthy of them if we don't eat a few bites with us? Of course, we must be cautious, and their targets may also include us.

You know, because of the joint boycott of local American banks, it is difficult for us to enter the American banking circle. So over the years, we have invested a lot of efforts in trust investment companies and mastered a lot of trust investment companies. In their opinion, this is a thorn in their eyes. They have always wanted to destroy all these trust investment companies. Now, the stock market bubble is rising, and it is impossible for those trust companies not to invest in it. Once they invest, Morgan and McDonald, who control the bank, will no longer issue loans, but instead start to quickly recover the loans. The entire stock market will collapse soon, and these trust companies will have to go bankrupt."

Alberto thought for a while and asked, "Uncle, isn't this a good opportunity? Our family has never been able to return to North America on a large scale. Now if we get back the loan, we will intervene, protect some important trust companies, and even take the opportunity to swallow up other companies. In this way, we can re-plant the foundation in the United States. Uncle, do you think this idea is feasible?"

Joshua thought for a while and replied, "Alberto, you can think of these things. It's very good. But you have to know that there are very large numbers of money. Such things are not something I can decide. It must be decided by the entire family. What decisions the family will make are not something I can determine. However, I can be sure that if the family wants to support your idea, you must define the idea, form a comprehensive and specific quantitative analysis, and a practical implementation plan. This is a big job, and there is not much time left for you. Can you complete such a report in a short time?"

After hearing this, Alberto was a little excited, but he tried hard to calm himself down and asked, "Uncle Joshua, aren't you going to help me in this matter?"

"Ah, my child, I still have my business, so you have to take the lead in this matter. How about it? Can I see this report in a week?"

Alberto thought for a while and replied, "Uncle Joshua, this is a bit difficult, but if you give me some investigation permissions and allow me to choose a few helpers, I will definitely be able to complete this plan in a week."

"I can agree with this," said Joshua. "As soon as possible, I can arrange their jobs."

"Thank you, Uncle Joshua. I'll prepare now." Alberto couldn't suppress his excitement. He was finally able to preside over important matters.

"Okay. Go down." Joshua said.

Seeing his nephew's excitement as he left, Joshua smiled and shook his head. He knew that the task he gave Alberto was just a training session. The possibility of the family approving such suggestions was very, very small, because now in South Africa is a tense moment of war clouds. Controlling South Africa's gold is too important for the family's business. Therefore, the family's main attention and strength must be put there, and it is difficult to invest such a great force in North America at this time. In fact, perhaps because of seeing through this, MacDonald and Morgan played such tricks at this time. Therefore, the most realistic approach now is to quietly withdraw their own funds before Scrooge McDonald and JP Morgan began to withdraw funds from the market.

Joshua thought this way and suddenly heard a soft knock on the door.

"Who, is there anything?" Joshua asked.

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

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

The door was gently pushed open, and John walked in, placed several newspapers neatly on Joshua's desk, and then said respectfully to Joshua: "Mr. Rothschild, all the newspapers are here today."

"Okay, go ahead and go." Joshua waved his hand gently, and John retreated silently and brought the door with him.

Joshua opened the drawer, took out his glasses and put them on the bridge of his nose - he was no longer young, and his eyes were still a little premature. Then he picked up the newspaper on the top.

That was a Wall Street Journal. In terms of financial professionalism, it was the most authoritative newspaper in the United States. John was very careful in doing things, so he always put this newspaper on the top.

Joshua picked up the newspaper and saw on its front page, there was an article like this: "The Disadvantages and Needs of Our Banking System".

...
Chapter completed!