Q Ratio

Weekly Update

Long-term Models and Metrics Can Lead to Misreading the Market

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