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Valuation

Dec 07 2017

Sector Rotation: Momentum Versus Valuation Factor

  • Dec 7, 2017

For sector overweight/underweight decisions, applying a Momentum overweight with both EM and DM countries has been most successful.

Jul 07 2016

Valuation Metrics: Numerators & Denominators

  • Jul 7, 2016

Different measures of value may tell different stories. Using various metrics, we examine the valuation of Large Caps, Small Caps and equity sectors.

Sep 09 2014

Elevated Short-Term Risks

  • Sep 9, 2014

The S&P 500 and NASDAQ Composite moved to new bull market highs in early September, but our quantitative work continues to warn there’s a least a short-term speed bump ahead for the stock market.

Sep 09 2014

Market Breadth And Leadership

  • Sep 9, 2014

While the lagging action of Small Caps should be monitored, persistent strength in most stock market breadth measures makes it difficult to argue the stock market has entered a true “distribution” phase.

Sep 09 2014

Stock Market Valuation Check

  • Sep 9, 2014

Stocks might look superficially cheap relative to bond yields, but they continue to offer little appeal in an “absolute” valuation sense.

Sep 09 2014

Why We Think Tapering Is Tightening

  • Sep 9, 2014

We believe the first move toward tighter policy occurred in January when the Fed first reduced the rate of its monthly bond purchases by $10 billion to $75 billion.

Sep 09 2014

Premature Inflation Fears

  • Sep 9, 2014

With commodity prices falling in recent months and consumer prices in the Eurozone almost flat over the latest 12 months, we’re surprised that inflation fears continue to climb the list of U.S. investor worries.

Sep 09 2014

Share Buybacks: They’re Not For Everyone...

  • Sep 9, 2014

Share repurchase activity in the S&P 500 dropped off in the second quarter, after first quarter buybacks challenged the all-time high levels seen in the second and third quarters of 2007 (a window of history that should ring a bell).

Sep 09 2014

The Bond Bull And The Dollar

  • Sep 9, 2014

Surging bond prices in Europe have opened a yield gap with the U.S. This premium favors more dollar strength in the coming months. In equity markets, the short term volatility in the dollar is a mildly bearish signal.

Sep 09 2014

Boring Is Best In The Forex Markets

  • Sep 9, 2014

Statistically, stocks perform a bit better in an environment of dollar strength than dollar weakness. The best stock market action, however, occurs when there’s relative calm in the forex markets.

Sep 09 2014

A Catalyst For Energy?

  • Sep 9, 2014

While a new secular bear market in commodities commenced in 2011, we still look for tactical opportunities in commodity-oriented stocks to arise from time to time.

Sep 09 2014

Gold Set To Tumble Again?

  • Sep 9, 2014

Gold market fundamentals appear superficially bullish...

Aug 07 2014

Relative Valuation Group Ranks

  • Aug 7, 2014

Consumer Discretionary and Information Technology produce six of the top ten groups.

Apr 07 2014

Small/Mid/Large Caps

  • Apr 7, 2014

Small Cap Premium Bounces Back To 23%

Mar 07 2014

Long-Term Equity Performance Coming Up Short

  • Mar 7, 2014

The bull market has pushed short-term annualized performance readings well above median levels, while the longer-term readings remain subdued. But there is a silver lining…

Mar 07 2014

Valuation: Today Versus The Late 1990s

  • Mar 7, 2014

We “mapped” current readings on six time-tested valuation ratios to the month in which those readings were first matched or exceeded as the late 1990s market bubble developed.

Feb 07 2014

The EM Value Trap?

  • Feb 7, 2014

EM valuations look cheap in a stock market world that otherwise doesn’t. But even their “cheapness” bothers us.

Feb 07 2014

Consumer Discretionary: End Of The Run?

  • Feb 7, 2014

Last month we suggested the top sector for 2013 would fall from grace in 2014, and the Consumer Discretionary stocks have been quick to cooperate in the last five weeks.

Feb 07 2014

Secular Bull Or Bear?

  • Feb 7, 2014

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.

Jan 08 2014

Royal Blues: High P/E Tier Beats S&P 500

  • Jan 8, 2014

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.

Dec 06 2013

Valuing The “Typical” Stock

  • Dec 6, 2013

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

Dec 06 2013

Last Target Standing?

  • Dec 6, 2013

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.

Nov 07 2013

Beyond P/E Ratios

  • Nov 7, 2013

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

Nov 07 2013

Stock Values: Absolutely, Relatively

  • Nov 7, 2013

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

Oct 08 2013

Valuations & Future Returns

  • Oct 8, 2013

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.

Oct 08 2013
Oct 08 2013

Global Valuations Rising, But U.S. Still At A Premium

  • Oct 8, 2013

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.

Aug 07 2013

A Comprehensive Look At The Emerging Markets: Diagnosis And Prognosis

  • Aug 7, 2013

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.

Apr 05 2013

Nothing But Clear Blue Skies Ahead? We're Not So Sure

  • Apr 5, 2013

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.

Apr 05 2013

A Techno-Fundamental Take On The World

  • Apr 5, 2013

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.

Mar 06 2013

Of Special Interest: Valuing The Stock Market - Do Interest Rates Matter?

  • Mar 6, 2013

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.

Mar 06 2012

Stock Market Observations

  • Mar 6, 2012

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.

 

Aug 03 2010

Going (More) Global

  • Aug 3, 2010

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.

 

 

Jan 05 2003

View From The North Country

  • Jan 5, 2003

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.

Sep 04 2002

Total U.S. Market Capitalization As A Percentage Of GDP: An Alternative Valuation Perspective

  • Sep 4, 2002

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

Dec 05 2001

Irrational Exuberance Then & Now

  • Dec 5, 2001

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.

Aug 01 1989

How Much More Is in This Market?

  • Aug 1, 1989

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.