Sep

25

Thumbs-up, the inverse of professor Robert Shiller's cyclically adjusted price-to-earnings ratio — or CAPE — was greater than the yield on a long-term Treasury. When Buffett wasn't crazy about stocks, the opposite was true.

Steve Ellison writes: 

Using the 12-month forward top-down earnings estimate for the S&P 500 of 93.75 published by Standard & Poors, the E/P for the S&P 500 is8.25%, 4.5 times as high as the 10-year Treasury bond yield.

Jordan Neuman comments:

Historically large stocks have an 11% ROE. The S&P's book value of 594 implies about $65 in earnings. Discount by the Baa rate of 5.2%, not the treasury yield, and you get 1250. With the S&P at 1136, the discount in this measure appears to be the widest since 1974.

Most of this list's valuation parameters are positive but I still can't stop the bleeding.
 


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