Comments on: GDP-Based Supercycle Valuation And Timing Oscillator http://www.ritholtz.com/blog/2009/03/gdp-based-supercycle-valuation-and-timing-oscillator/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Tue, 14 Feb 2012 23:28:32 +0000 hourly 1 http://wordpress.org/?v=3.0.5 By: EDF http://www.ritholtz.com/blog/2009/03/gdp-based-supercycle-valuation-and-timing-oscillator/comment-page-1/#comment-155269 EDF Fri, 20 Mar 2009 13:56:54 +0000 http://www.ritholtz.com/blog/?p=21877#comment-155269 Correlations with the U.S. GDP are fine for the world that was but not for the world that is. Correlations with the U.S. GDP are fine for the world that was but not for the world that is.

]]> By: saunderscc http://www.ritholtz.com/blog/2009/03/gdp-based-supercycle-valuation-and-timing-oscillator/comment-page-1/#comment-153938 saunderscc Mon, 16 Mar 2009 17:38:35 +0000 http://www.ritholtz.com/blog/?p=21877#comment-153938 Ok, interesting. However, what am I to imply from this? How does this translate to A) specific levels on indices, B) over what time horizon, and C) do target levels change depending upon time elapsed? Since this is a ratio of, "...nominal GDP..." to, "...stock market's total return index..." I can't simply assume that indices must contract a total of 80% before they hit bottom. In fact, much like a P/E ratio, we know that a constant P and rising E yields a smaller P/E, as does a declining P and a constant E. So, should my takeaway be that if the market rebounds strongly (denominator) while GDP continues to contract (numerator) that we can get to the -80% mentioned? Or, if GDP flattens and stocks continue to fall... You get the idea. Again, interesting relationships, but somebody please tell me why this is relevant. I'm clearly missing the context of the message. BTW, what exactly is the, "May 9th intrday low?" Ok, interesting. However, what am I to imply from this? How does this translate to A) specific levels on indices, B) over what time horizon, and C) do target levels change depending upon time elapsed?

Since this is a ratio of, “…nominal GDP…” to, “…stock market’s total return index…” I can’t simply assume that indices must contract a total of 80% before they hit bottom. In fact, much like a P/E ratio, we know that a constant P and rising E yields a smaller P/E, as does a declining P and a constant E.

So, should my takeaway be that if the market rebounds strongly (denominator) while GDP continues to contract (numerator) that we can get to the -80% mentioned? Or, if GDP flattens and stocks continue to fall… You get the idea.

Again, interesting relationships, but somebody please tell me why this is relevant. I’m clearly missing the context of the message.

BTW, what exactly is the, “May 9th intrday low?”

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