Published May 27, 2022
After seven weeks of declines, the stock market finally found some buyers this week. Still, the trend remains down. The comments below from Delta Research provide a couple of charts to frame the recent declines and what might lie ahead for the stock market in the coming months. (more…)
Published October 15, 2021
There is always plenty of talk about whether the stock market is ‘fairly’ valued, expensive, or cheap. It is a question without an answer; there are only opinions. Because in the marketplace, the price is determined solely by what investors are willing to pay. (more…)
Published September 3, 2021
The S&P 500 has spent ten straight months above its 50-day moving average, one of history’s longest stretches of calm. Ultra-low interest rates from an extremely cautious and accommodative Federal Reserve have supported risk-taking investors by keeping the cost of money near zero. Very strong corporate earnings have rewarded investors by expanding the ‘E’ in the P/E ratio, justifying the market’s run upward. (more…)
Published September 20, 2019
Finance, and investing even more so, are resting on the foundation of human emotion. How much a stock is worth certainly has some underpinning in the company’s earnings. But perhaps more important is the price-earnings or P/E ratio, which is how much investors are willing to PAY for those earnings. (more…)
Published December 29, 2017
There is a certain beauty to how we invest here at TimingCube. We buy the stock market or sell it. That’s all! With that approach we do not need to read any tea leaves regarding stock valuation, whether the Federal Reserve is going to ramp interest rates too fast or too slow, whether the economy will grow more or less than expected. We simply own the stock market when it is rising and sell it when it is falling. (more…)
Published December 15, 2017
Outside the U.S. the post-financial crisis rally has been a halting affair, occurring in two major steps higher. Unlike the U.S., each step was greeted with some misgivings as Europe wrestled with its new currency and European Union financial structure while China’s economy digested a massive wave of growth in the prior decade. (more…)
Published November 17, 2017
We thought the outlook below from Delta Investments provided a good overview of the factors supporting the stock market. Enjoy!
Our 2018 S&P 500 Index outlook is up. If the P/E remains constant as it has for the past two years, the S&P 500 should be up in-line with earnings or about 11%.
The following ten factors support our 2018 bullish investment thesis: (more…)
Published August 4, 2017
There are a number of folks talking about how overvalued this stock market is. Many of them refer to the metrics, indicators, and models discussed below. Read through this analysis from Jill Mislinski and we will return for some perspective at the end.
“Here is a summary of the four market valuation indicators we update on a monthly basis.
• The Crestmont Research P/E Ratio
• The cyclical P/E ratio using the trailing 10-year earnings as the divisor
• The Q Ratio, which is the total price of the market divided by its replacement cost
• The relationship of the S&P Composite price to a regression trendline