IT IS TOUGH TO MANIPULATE PRICE-to-SALES & IT IS WORSE THAN PRIOR TO THE DOTCOM BUBBLE IMPLOSION By one measure, the stock market’s valuation is twice as high as 2000 — SOURCE: 08-09-18 MarketWatch.com, Sue Chang – “If This Chart Doesn’t Scare You Out Of Stocks, Nothing Will” — A lot has changed since the […]
INVESTORS SINCE 2014 HAVE BEEN PAYING TWICE THE RATE OF EARNINGS GROWTH Always Optimistic “Since the end of 2014, investors are paying twice the rate of earnings growth.” “No matter how you look at the data, the point remains the same. Investors are currently overpaying today for a stream of future sales and/or earnings which […]
BoAML: 40% OF THE LAST 20 YEARS OF MARGIN EXPANSION WAS FROM GLOBALIZATION — SOURCE: 06-21-18 ZeroHedge – “BofA: 40% Of Margin Expansion In The Last 20 Years Is From Globalization” — Roughly around the time David Rosenberg “calculated” the contribution of the Fed’s unprecedented monetary policy on the S&P (which he estimated at roughly […]
MYSTERIOUSLY FINANCIALIZED (OR NOT?) — SOURCE: 06-08-18 Alhambra, Jeff Snider – “Mysteriously Financialized (Or Not)”– The Federal Reserve published its latest update for Z1, the Financial Accounts of the United States (formerly Flow of Funds). That means we can update our valuation metrics for a good piece of the US stock market. Tobin’s Q starts with the premise […]
FAANG BUBBLE STATISTICS — SOURCE: 06-08-18 EconMatters – “FAANG Bubble Statistics” — Everyone has piled into the same trade for long enough that we have an acronym for this herd mentality in FANG, then expanded to FAANG, and other derivatives to include hot stocks like Microsoft and Nvidia. The lack of imagination on behalf of […]
MARKET VALUATION IMPROVE SLIGHTLY
MORE THAN HALF OF 2018 EARNINGS GROWTH EXPECTED FROM TRUMP’S TAX CUTS & STOCK BUYBACKS — SOURCE: 03-12-18 ZeroHedge – “More Than Half Of 2018 Earnings Growth Is From Trump’s Tax Cuts And Stock Buybacks” — So to summarize: 9 years into the world’s 2nd biggest bull market, in the second longest economic expansion in […]
DIVORCED FROM REALITY: PRICE & FUNDAMENTALS SOURCE: 03-07-18 John Coumarianos via RealInvestmentAdvice.com, There are many ways of assessing the value of the stock market. The Shiller PE (price relative to the past decade’s worth of real, average earnings) and Tobin’s Q (the value of companies’ outstanding stock and debt relative to their replacement cost) are likely the […]
FUNDAMENTALS: MARKET REMAIN HISTORICALLY OVERVALUED — SOURCE: 12-05-17 Doug Short – “Market Remains Overvalued” — Here is a summary of the four market valuation indicators we update on a monthly basis. The Crestmont Research P/E Ratio (more) The cyclical P/E ratio using the trailing 10-year earnings as the divisor (more) The Q Ratio, which is […]
PROFIT GROWTH IS HISTORICALLY PROVEN TO BE MEAN-REVERTING — SOURCE: 11-30-17 RealInvestmentAdvice.com – “The Mean-Reverting History Of Profit Growth” — As the markets push once again into record territory the question of valuations becomes ever more important. While valuations are a poor timing tool in the short term for investors, in the long run, valuation […]
