Lance on Dec 10 2008 | Filed under: Domestic Equities, Valuation
Over at dshort.com there is an interesting look at valuation and regression to the mean (click image to link to larger version)
The peak in 2000 marked an unprecedented 160% overshooting of the trend, which is double the overshoot in 1929. The index has been above the trend for 17 years. We also see that the [...]
Lance on Nov 25 2008 | Filed under: Housing Market, economy
We keep hearing about positive signs month after month, but the latest data on the housing markets shows the pace of declines has been accelerating and widening, not slowing down.
In my opinion this is good. The decline in prices of overvalued assets is a good thing, whether houses, stocks or debt. The problem has been [...]
Lance on Nov 18 2008 | Filed under: Asset Allocation, Domestic Equities, Valuation, indexes
Yes, but they are supposed to be if you want reasonable returns for the risk, which is one more reason the Fed Model is wrong. Compared to the past however not that cheap. Jim Hamilton takes a look:
We’re currently at a P/E around 14, a bit below the historical long-run average P/E of 16.3, meaning [...]
Lance on Oct 14 2008 | Filed under: Risk, Valuation, today's links
Yesterday was one fo the best days ever for the stock markets:
What does it mean? I think it ultimately depends on factors unrelated to the move itself. Econompic provides us with some context:
Obviously large one day moves in and of themselves tell us little about what is to come. So, let us at least look [...]
Lance on Feb 24 2008 | Filed under: Asset Allocation, Domestic Equities, Risk, Valuation
Mark Hulbert reports on two indicators that historically have pointed towards above average returns for stocks:
The indicator in question focuses on corporate money-raising. Considerable research has shown that when companies turn aggressively to the equity market for their financing needs, through new issues or secondary offerings, it is a sign that the stock market is [...]
Lance on Feb 15 2008 | Filed under: Valuation
The word ‘heresy’ not only means no longer being wrong; it practically means being clear-headed and courageous. The word ‘orthodoxy’ not only no longer means being right; it practically means being wrong.
-GK Chesterton
Lance on Feb 13 2008 | Filed under: Around the Web
Fallacies do not cease to be fallacies because they become fashions.
- GK Chesterton
Lance on Feb 11 2008 | Filed under: Great Investors, Humor, Risk, Valuation, economy
John Hussman is always worth a read. I like this from his letter this morning:
As I wrote in April 2000, bear market psychology typically evolves something like this:
“This is my retirement money. I can’t afford to be out of the market anymore!”
“I don’t care about the price, just get me in!!”
“It’s a healthy correction”
“See, it’s [...]
Lance on Feb 11 2008 | Filed under: Asset Allocation, Economics, Great Investors, Housing Market, Risk, Valuation
Jeremy Grantham echoes a few themes here at Risk and Return in this interview with Barron’s:
Secondly, this occurred at a time of what I believe is the first global bubble in pretty well all asset prices, so there is a much greater degree of broad-based vulnerability.
Lance on Feb 11 2008 | Filed under: Absolute Return, Asset Allocation, Domestic Equities, Great Investors, Hedge Funds, Relative Return, Risk, Valuation, indexes, real estate
The recent downturn from the high in October has led to a great deal of chatter about the markets being cheap. That the recent turmoil has presented us with wonderful buying opportunities based on valuation. Readers here know that I disagree, and vehemently. Which doesn’t mean there isn’t money to be made as speculators. Certainly [...]
Lance on Feb 04 2008 | Filed under: Great Investors, Valuation
To paraphrase [value investing pioneer] Ben Graham, the markets seem high, they are high, and they are as high as they seem.
-Jean-Marie Eveillard
I know, I know. This isn’t what you here, but they are.
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