I love this debate between the idea of Tobin’s Q-Ratio as th be all for valuation analysis. It is embodied between Smithers & Co. quoted in this scary BBRG article and Pragmatic Capitalism’s Cullen Roche.
Here is PragCap:
“Better yet, look at the number of times this ratio has been cited during the most recent bull market as a reason to exit stocks:
- In November of 2009 Smithers said equities were 40% overvalued (see here also).
- In December 2010 Smithers said equities were 70% overvalued.
- In March of 2012 Smithers said equities were 50% overvalued.
- And now we hear the citation about an 80% overvaluation.
At least he is consistent!
Let me remind readers of the folly of Single Variable Analysis . . .
Single vs. Multiple Variable Analysis in Market Forecasts (TBP, May 4th, 2005)
When Correlations Lie (Bloomberg View June 27, 2014)
Charles E. Gilbert, Norman J. Morin, Andrew D. Paciorek, and Claudia R. Sahm Residual Seasonality in GDP Federal Reserve, May 14, 2015 Real GDP growth stalled in the first quarter of this year, according to the advance estimate from the Bureau of Economic Analysis (BEA). With a second year in a row of unusually weak…Read More
The preoccupation with all of the things that could possibly go wrong has been a persistent characteristic of this economic recovery. It was termed recession porn in 2009. It has been a focus of websites, pundits and, of course, goldbugs. When an economist picks up the nickname “Dr. Doom,” it suggests an obsession with the negative. Recession porn…Read More
Our 2-for-Tuesday morning train reads: • Which Stock Market Is Scarier: U.S. or China? (BV) see also Don’t Fret About Tobin’s Q (Crossing Wall Street) • How likely is a recession? (And how fast is a forecast?) (FRED Blog) • The Ten Harsh Financial Commandments (Irrelevant Investor) see also Compare and Contrast (Polemics Pain) • The View from the Front Seat of the…Read More
Category: Financial Press
The data on this is fascinating:
Many people plan on supplementing their retirement funds by working past 65, but this plan may not be as sound as it seems. Bloomberg’s Suzanne Woolley breaks down the expectations and often unfortunate truths of working through retirement.
Source: Bloomberg May 18, 2015 7:32 AM EDT