How Did Bancitaly Justify The Stock Market Crash Of 1929

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However, despite the increase in stock prices, many managers and corporate executives did not feel as though their profits were high enough to justify the stock values. The head of Bancitaly stated that he did not believe the earnings of his company justified his company’s stock price; several other companies, such as Canadian Marconi and Brooklyn Edison, shared the same opinion. Data on the price-earnings ratios of the time also supports the possibility of a bubble and excessive speculation. In 1929, before the crash in October, the average price-earning ratio of 45 industrial stock was over 15.While this is high, it alone is not enough to prove that stocks were overpriced. It is however, supported by the fact that in the years 1928 and 1929,
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