Valuations

Valuations

  • Stock Market

    How Far Could It Fall?

    September 09, 2015 BY Doug Ramsey
    Our valuation work shows many “garden variety” cyclical bear markets bottom out fairly close to long-term median valuation levels on the S&P 500. A reversion to median valuations would entail a peak-to-trough S&P 500 loss of –21.1%.

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  • Stock Market

    Minding The Gaps

    August 07, 2015 BY Doug Ramsey

    We think stock market action in the next few months will provide the Fed with an excuse to skip any rate increase in 2015. But our view is a minority one, and futures’ market odds on a September increase shot up in early August. Either way, the obsession over the timing of a Fed rate hike ignores the fact that world P/E ratios are already contracting—at least on the basis of our 5-Year Normalized EPS.

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  • Stock Market

    Emerging Markets: A Half-Off Sale!

    August 07, 2015 BY Doug Ramsey

    The Chinese government’s repeated stock market intervention attempts over the past several weeks have been remarkable, and obviously antithetical to the country’s move toward a more laissez faire corporate environment.

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  • Stock Market

    Chinese Equity Market: Valuation Gap And Going Private

    August 07, 2015 BY Jun Zhu

    The recent capitulation of the Chinese domestic equity market (or A-shares) makes headlines almost every day. Different theories, circulating in both China and overseas, pop up frequently to explain the daily movement of A-shares. It seems the investment community gets excited when the Chinese market is on the decline (but not so much when the market is on the upswing); many investors are quite reactive to any negative news coming out of China.

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  • Stock Market

    High Quality Outperforming, But Valuations A Concern

    July 08, 2015 BY Jun Zhu

    High Quality stocks had another winning quarter on a relative basis returning +0.1% in Q2, while Low Quality stocks lost 2.8%. Small Cap High Quality stocks also beat their counterparts.

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  • Stock Market

    Stock Market Valuation Check

    June 05, 2015 BY Doug Ramsey

    It now goes almost without saying that whenever the stock market moves to a new cycle extreme, so does the MTI’s Intrinsic Value category. In late May, this reading dropped below –400 for the first time in this bull market, and is now within 150 points of its 2007 extreme.

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  • Stock Market

    Yet Another All-Time High...

    June 05, 2015 BY Doug Ramsey

    It’s generally a bad idea to roll out new valuation readings that one doesn’t fully understand late in a cyclical bull market. But we’re going to do it anyway, recognizing that a similar practice proved to be the undoing of dozens of fund managers and Tech analysts at the turn of the millennium.

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  • Stock Market

    Emerging Markets: Close… But Not Quite

    May 08, 2015 BY Doug Ramsey

    Emerging Market stocks are probably the cheapest equity subgroup in the world today, trading at 13.0x our 5-Year Normalized EPS estimate—much lower than that of foreign Developed Markets (17.6x) and the S&P 500 (21.3x). But, EM stocks have languished near these valuation levels for almost three years.

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  • Stock Market

    Tech: One Year After The “Bust”

    May 08, 2015 BY Doug Ramsey

    At a time when social media stocks are the rage, stodgy “Old Tech” has quietly tacked on a 20% gain in the 13 months since the social media peak, while the NASDAQ Internet Index is still a bit below its March 2014 high. Yet, “Old Tech” P/CF remains below the level of 1995.

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  • Stock Market

    A Quick Check On Global Fundamentals

    March 06, 2015 BY Doug Ramsey

    The Street’s most clever invention is “12-month forward operating earnings” because the stock market invariably appears cheap on the basis of such inflated estimates.

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