by
Nomi Prins
Stock Market
by
Brian Pretti
Executive Summary
- Will global capital continue to push US stocks higher, despite their stretched valuations?
- Global capital is becoming more cautious
- S&P outperforming as capital seeks the safety of "blue chip" companies
- Investing in the age of anomalies
If you have not yet read Part 1: Time To Toss The Playbook available free to all readers, please click here to read it first.
This leads us to equities and, again, this very important concept of being flexible in thinking and behavior. Historically, valuation metrics have been very important in stock investing. Not just levels of earnings and cash flow growth, but the “multiple” of earnings and cash flow growth investors have been willing to pay to own individual stocks. This has been expressed in valuation metrics such as price-to-earnings, price relative to book value, cash flow, etc. To the point, in the current market environment, common stock valuation metrics are stretched relative to historical context.
In the past we have looked at indicators like total stock market capitalization relative to GDP. The market capitalization of a stock is nothing more than its shares outstanding multiplied by its current price. The indicator essentially shows us the value of stock market assets relative to the real economy. Warren Buffet has called this his favorite stock market indicator.
The message is clear. By this valuation metric, only the…
Investing In The Age Of Anomalies
PREVIEW by Brian PrettiExecutive Summary
- Will global capital continue to push US stocks higher, despite their stretched valuations?
- Global capital is becoming more cautious
- S&P outperforming as capital seeks the safety of "blue chip" companies
- Investing in the age of anomalies
If you have not yet read Part 1: Time To Toss The Playbook available free to all readers, please click here to read it first.
This leads us to equities and, again, this very important concept of being flexible in thinking and behavior. Historically, valuation metrics have been very important in stock investing. Not just levels of earnings and cash flow growth, but the “multiple” of earnings and cash flow growth investors have been willing to pay to own individual stocks. This has been expressed in valuation metrics such as price-to-earnings, price relative to book value, cash flow, etc. To the point, in the current market environment, common stock valuation metrics are stretched relative to historical context.
In the past we have looked at indicators like total stock market capitalization relative to GDP. The market capitalization of a stock is nothing more than its shares outstanding multiplied by its current price. The indicator essentially shows us the value of stock market assets relative to the real economy. Warren Buffet has called this his favorite stock market indicator.
The message is clear. By this valuation metric, only the…
by
Chris Martenson
One of the models of the future that I favor is the Ka-Poom theory put out by Erik Jansen of iTulip.com back in 1999.
Basically it states that the end of a bubble era begins with a sharp deflationary event (the ‘Ka’ part of the title), but ends in a highly inflationary blow-off, (the ‘Poom’).
It’s a one-two punch. Down then up.
First The Fall…
PREVIEW by Chris MartensonOne of the models of the future that I favor is the Ka-Poom theory put out by Erik Jansen of iTulip.com back in 1999.
Basically it states that the end of a bubble era begins with a sharp deflationary event (the ‘Ka’ part of the title), but ends in a highly inflationary blow-off, (the ‘Poom’).
It’s a one-two punch. Down then up.
by
Chris Martenson
John Hussman is highly respected for his prodigious use of data and adherence to what it tells him about the state of the financial markets. His regular weekly market commentary is widely regarded as one of the best-researched, best-articulated publications available to money managers.
John's public appearances are rare, so we're especially grateful he made time to speak with us yesterday about the precarious state in which he sees global markets. Based on historical norms and averages, he calculates that the ZIRP and QE policies of the Fed and other world central banks have led to an overvaluation in the stock market where prices are 2 times higher than they should be.
John Hussman: The Stock Market Is Overvalued By 100%
by Chris MartensonJohn Hussman is highly respected for his prodigious use of data and adherence to what it tells him about the state of the financial markets. His regular weekly market commentary is widely regarded as one of the best-researched, best-articulated publications available to money managers.
John's public appearances are rare, so we're especially grateful he made time to speak with us yesterday about the precarious state in which he sees global markets. Based on historical norms and averages, he calculates that the ZIRP and QE policies of the Fed and other world central banks have led to an overvaluation in the stock market where prices are 2 times higher than they should be.
by
Adam Taggart
A month ago, in an analysis titled Defying Gravity, I wrote about the unsustainable state of the stock market's high prices.
In it, I noted how the stock market had risen for an aberrantly-long time time without a correction, and that it hadn't even tested its 200-daily moving average price once since the beginning of 2012:
Gravity Returns – The Market Drops Nearly 5% in 3 Days
by Adam TaggartA month ago, in an analysis titled Defying Gravity, I wrote about the unsustainable state of the stock market's high prices.
In it, I noted how the stock market had risen for an aberrantly-long time time without a correction, and that it hadn't even tested its 200-daily moving average price once since the beginning of 2012:
by
Adam Taggart
by
Brian Pretti
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