Valuation

Is a new secular bull market underway? New highs in essentially all U.S. undermine the argument from the shrinking pool of secular bears. But new converts to the bull thesis should be concerned about the valuation levels already reached.

• Read more

The High P/E Tier is now slightly overvalued, the Middle P/E Tier is overvalued, and the Low P/E Tier continues being quite overvalued.

• Read more

Current median valuations are almost identical to those seen at the bull market highs of March 2000 and October 2007.

• Read more

The inflation-adjusted all-time high for the S&P 500 is currently 2061, a figure we think will be just out of reach for 2014.

• Read more

Some of our alternative valuation measures find the market even pricier than P/E ratios do.

• Read more

The severity of the market’s current overvaluation depends on one’s historical vantage point.

• Read more

The U.S. market rates anywhere from mildly overvalued to very overvalued relative to other developed markets. Foreign markets might be the last remaining pocket of yield that isn’t overvalued.

• Read more

• Read more

The large valuation discount on foreign shares has narrowed a bit, reflecting better relative action in foreign shares over the past 14 months and relatively weaker foreign fundamentals.

• Read more

We examine Emerging Markets from both the top-down and bottom-up perspectives as we try to identify where to move and what to expect. We check in on two successful EM thematic group ideas as well.

• Read more

At 15.8x Normalized EPS, the non-U.S. developed world (measured by the MSCI World Ex USA Index) still hasn’t managed to recover to its old lows of 18x seen in both 1992 and 2002.

• Read more

With no obvious technical resistance left for the U.S. stock market, we’re skeptical of the “long cycle” view, primarily based on valuations and “provincial” data points.

• Read more

Models based on so-called relative valuations have a poor track record in practice, having misled investors at several historic inflection points. Interest rates have virtually no impact on stock market valuations, but they may have transitory effects on stocks in the short term.

• Read more

Under the “principle of alternation”—in which price patterns vary from cycle to cycle for the sole purpose of fooling market participants—the bull market is (in my view) unlikely to top out in the spring or winter of 2012.

• Read more

MSCI Index very undervalued, as the recovery off the March 2009 lows has left valuations still near prior bear market lows. Relative to foreign markets, the U.S. looks expensive. This is why we continue to maintain a healthy exposure to foreign stocks…especially emerging markets.

• Read more

Valuation tools comparing stock earnings yields to bond yields (i.e. the Fed Valuation Model) are worthless. History shows they don’t perform very well at all.

• Read more

Total U.S. Market Capitalization As A Percentage Of GDP: Identifying “Fair Value.”

• Read more

Many investors have come to realize just how overvalued the stock market became in the late 1990s. Alan Greenspan may have been early with his comment about “irrational exuberance” in late 1996, but in hindsight his warning was warranted.

• Read more

Clients are asking how much more is in this market? Herein we will attempt to provide an answer to this question, without the aid of charts, astrology, or Evel Knutson. Rather, we will employ over 60 years of historical valuation facts.

• Read more