Sentences with phrase «by rich valuations»

As of last week, the Market Climate for stocks remained in the most negative 0.5 % of all historical observations, and was characterized by rich valuations, unfavorable market action, and a variety of hostile «Aunt Minnies» that are associated with poor subsequent returns.

Not exact matches

The considerations behind shifts in these market return / risk profiles should be clear - the strongest profiles emerge when a significant retreat in valuations is coupled with an early improvement in market internals; the weakest profiles emerge when overvalued, overbought, overbullish conditions develop or when rich valuations are joined by broadening divergence or deterioration in market internals.

I've long noted that the analysis of market action can help to overcome some of this frustration, as stocks have often provided good returns despite rich valuations so long as market internals were strong, and the environment was not yet characterized by a syndrome of overvalued, overbought, overbullish, and rising yield conditions.

It's important to distinguish between the level of valuations, which has indeed become breathtakingly extreme in recent years, and the mapping between valuations and longer - term market returns (which we observe as a correspondence, where rich valuations are followed by poor returns and depressed valuations are followed by elevated returns).

All rich valuations do is provide a window of opportunity for current holders to obtain a wealth transfer from buyers, but the only way to realize that is by selling.

Put simply, when valuation measures are steeply elevated but investors remain inclined to speculate, as evidenced by very broad uniformity of market action and the absence of internal divergences, rich valuations often have little effect on market outcomes.

On the other hand, both historically and even since 2009, when investors have shifted toward risk - aversion, as evidenced by divergent market internals, rich valuations and fragile economic foundations have typically resulted in steep market losses.

Netflix's stock valuation has been a constant source of debate for years, and currently is trading at a price - to - earnings (P / E) ratio of 123x, which is rich by almost every measure — no matter what kind of business model it is.

This despite the fact that the 2007 peak reflected rich valuation multiples against earnings that were themselves inflated by abnormally elevated profit margins.

Even if we observe rich valuations, there can be some justification for accepting market risk during periods when market internals are uniformly strong, provided that the environment is not also characterized by a syndrome of overbought, overbullish and rising - interest rate conditions.

If valuations affect long - term returns, Buy - and - Hold is the purest and most dangerous Get RIch Quick scheme ever concocted by the human mind (although not intended to be such, to be sure.)

As of last week, the Market Climate in stocks was characterized by a combination of rich valuations, unfavorable market action, continued negative economic pressures on forward - looking indicators, and additional indicators (sentiment, credit spreads, etc) associated with a poor average return / risk profile in stocks.

But by combining factor valuation with past performance, investors gain a richer toolkit for making well - informed allocation decisions among smart beta managers.

Market movements as a result become self - reinforcing, until the cash flows can by no means support valuations, or are so rich that businessmen buy and hold.

«Although equity valuations do not appear to be rich relative to Treasury yields, equity prices are vulnerable to rises in term premiums to more normal levels, especially if a reversion was not motivated by positive news about economic growth,» the Fed said.

As proof of the table - turning they envision, Dubner and Levitt trot out Zillow.com, the free online home - valuation tool started by Expedia founder (formerly of Microsoft) Rich Barton.