This is a huge amount, but it is only five times the Central Banks' Balance Sheets that reached $17.5 Trillion.
But the real point is that from 2017 the CB BS increased by some 10 trillions, whereas SM Cap by some 20 trillions only.
Showing posts with label Valuation. Show all posts
Showing posts with label Valuation. Show all posts
Tuesday, December 12, 2017
Global Market Cap and CB Balance Sheets
It was in the mews recently that Global Stock Market Capitalization has reached $80 Trillion.
This is a huge amount, but it is only five times the Central Banks' Balance Sheets that reached $17.5 Trillion.
But the real point is that from 2017 the CB BS increased by some 10 trillions, whereas SM Cap by some 20 trillions only.
This is a huge amount, but it is only five times the Central Banks' Balance Sheets that reached $17.5 Trillion.
But the real point is that from 2017 the CB BS increased by some 10 trillions, whereas SM Cap by some 20 trillions only.
Wednesday, November 22, 2017
Monday, August 7, 2017
Valuations at glance
Some pundits say that valuations are very stretched. I don't think so because of two reasons:
- The earnings estimate is very ambitious that seems to be underpinned by economic data.
- We cant see any inflationary pressure that could trigger significant increase in L/T yields and discount rates.
Monday, March 20, 2017
Factset earnings update
Factset updated its Earnings Insights:
Earnings Growth: For Q1 2017, the estimated earnings growth rate for the S&P 500 is 9.0%. If 9.0% is the actual growth rate for the quarter, it will mark the highest (year-over-year) earnings growth for the index since Q4 2011 (11.6%).
Valuation: The forward 12-month P/E ratio for the S&P 500 is 17.8. This P/E ratio is above the 5-year average (15.0) and above the 10-year average (13.9).
It is worth also to take a look at dshort.com earnings analysis Just to put this into a longer term context:
I think one important factor is not taken into account here, the historically low interest rates. We know from CAPM that it must result in higher P/E ratios. This post on Damodaram Online suggests an alternative approach in this ultra low yield environment, comparing stock P/E to Bond P/E.
This suggests that we aren't on a bubble territory yet.
Valuation: The forward 12-month P/E ratio for the S&P 500 is 17.8. This P/E ratio is above the 5-year average (15.0) and above the 10-year average (13.9).
It is worth also to take a look at dshort.com earnings analysis Just to put this into a longer term context:
I think one important factor is not taken into account here, the historically low interest rates. We know from CAPM that it must result in higher P/E ratios. This post on Damodaram Online suggests an alternative approach in this ultra low yield environment, comparing stock P/E to Bond P/E.
This suggests that we aren't on a bubble territory yet.
Friday, January 27, 2017
Inflation and valuation
There is a great article in the WSJ about inflation and valuation. The bottom line is:
- Reflation supports corporate earnings despite higher wages since those wages are spent,
- but it negatively impacts multiples through increase in discount rate, that can offset higher profits.
- "If it gets near 4% FED's really behind the curve" to cool down the economy that doesn't help corporate profits.
This chart illustrates the historic relationship.
- Reflation supports corporate earnings despite higher wages since those wages are spent,
- but it negatively impacts multiples through increase in discount rate, that can offset higher profits.
- "If it gets near 4% FED's really behind the curve" to cool down the economy that doesn't help corporate profits.
This chart illustrates the historic relationship.
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