Sentences with phrase «extreme valuation»

He qualifies his statement, however, by pointing out that such extreme valuation variances can take a while to shrink.

For example, markets entered a period of extreme valuation by many measures in 1994 and continued to push higher for 6 more years before finally succumbing to valuation levels that were, by some measures, more than twice as high as any other period in history.

This partly explains extreme valuation differences between equities and government bonds.

Stock markets are maintaining their momentum but buyers should beware of the extreme valuation gap between the highest and lowest - priced stocks.

The extreme valuation premiums afforded to defensive, high - quality and high - growth stocks means that their inverse corollaries — cyclically geared value stocks — are historically cheap and under - owned.

When investors have to argue among themselves about which news event is causing them to worry, the news is probably just providing day - to - day occasions for investors to act on more general concerns, like extreme valuation.

The extreme valuation premiums afforded to defensive, high - quality and high - growth stocks means that their inverse corollaries — cyclically geared value stocks — are historically cheap and under - owned.

Owing to the economic strength of the late 1990's, the least extreme valuation measures were based on earnings.

You'll notice that the overvaluation at the 2000 peak was really dominated by extreme valuation in the top decile of price / revenue ratios.

Put simply, valuations have enormous implications for long - term investment returns, and for prospective market losses (or gains) over the completion of any market cycle, especially those that feature historically extreme valuation peaks (or troughs).

Tech companies with no profits (or even much of a business plan) soared to extreme valuations that were justified, in part, by the belief that future profits would be made faster and that equities were less risky than in the past.

Even with these extreme valuations, favorable trend uniformity is all we would need to become more constructive here.

When you look back on this moment in history, remember that extreme valuations had already been joined by deterioration in market internals and credit spreads.

This, combined with extreme valuations and poor trend uniformity, is extremely hostile.

In short, given currently extreme valuations, the most historically reliable valuation methods instruct us to expect total returns of roughly zero for the S&P 500 over the coming decade.

Who needs retail stool pigeons to chase extreme valuations even higher?

The Market Climate remains characterized by extreme valuations, unfavorable trend uniformity, and hostile yield trends.

That's really the aspect of present conditions that now gives extreme valuations their bite.

Second, if one wishes to argue that today's low interest rates will «justify» permanently extreme valuations even 10 - 12 years from today, it's useful to remember that if interest rates are low because the growth rate of cash flows is also low, then no valuation premium is «justified» at all.

Meanwhile, extreme valuations imply the likelihood of steep market losses over the complete cycle, and also for poor S&P 500 total returns on a 10 - 12 year horizon, but valuations often have little effect on near - term market behavior.

Given the increasingly steep slope of the current market advance, along with the most extreme valuations in history and the most lopsided bullish sentiment in more than three decades, it's quite possible that this instance will be different.

That's the one signal that has been favorable during most of the recent advance, and it is why, despite extreme valuations, I left as much as 20 % of our stocks unhedged until the interest rate climate turned hostile a couple of weeks ago.

Rather, a Crash Warning means that current market conditions (extreme valuations, poor trend uniformity, hostile yield trends) match only about 4 % of history, yet every crash of note has emerged from this one set of conditions.

I am still weighing alternative descriptions for this Climate - extreme valuations, unfavorable trend uniformity and hostile yield trends.

But in the unlikely case that investors are willing to send this market into a renewed bubble in the face of extreme valuations, the S&P would only have to advance another 4 % or so on a weekly closing basis to induce us to participate at least moderately.

The most extreme valuations include mass retailers such as Wal - Mart, Target, Home Depot, Best Buy, Kohls, and Lowe's, and large drug and healthcare companies such as Amgen, Abbott Labs, Baxter, American Home Products, Forest Labs, Johnson & Johnson, Medtronic, Stryker, United Healthcare, and Tenet.

But with long - term bonds and non-cyclical equity sectors trading at historically extreme valuations while cyclical sectors trade at valuations below their long - term average, we think that risk aversion is creating numerous investment opportunities for investors willing to build a portfolio of more economically sensitive companies.

The main points here are that QE has encouraged the dramatic overvaluation of virtually every class of investments; that these elevated valuations don't represent «wealth» (which is embodied in the future stream of deliverable cash flows, not in the current price); that extreme valuations promise dismal future outcomes for investors over a 10 - 12 year horizon; and that until a clear improvement in market internals conveys a resumption of speculative risk - seeking by investors, the current combination of extreme valuations and increasing risk - aversion, coming off of an extended top formation after persistent «overvalued, overbought, overbullish» extremes, represents the singularly most negative return / risk classification we identify.

Are these extreme valuations «good»?

No, the elevated level of financial assets reflects extreme valuations, not an increase in the rate of financial investment.

On that point, to argue that low interest rates are enough to make extreme valuations irrelevant is to wholly miss the point.

But this reasonably good outcome results precisely from the fact that the extreme valuations at the 1987 peak are roughly matched by the extreme valuations of today.

However, in an environment of extreme valuations, even fairly subtle deterioration in the uniformity of market internals should be taken as a signal of increasing risk - aversion among investors, and the market becomes vulnerable to steep and abrupt losses.

The central issue is much more general: when extreme valuations and lopsided bullish sentiment are joined by deterioration in market internals, one faces an environment that couples compressed risk premiums with increasing risk aversion.

The dismal long - term prospects for market returns are essentially baked - in - the - cake as a result of present, extreme valuations.

I just have to be able to understand that risks are dramatically rising when you have such extreme valuations at the same time you have rising interest rates and a tightening of monetary policy.

Robert Shiller has been writing op - eds for the past few years discussing the extreme valuations and wondering how they persist.

Back in October, I noted «investors clearly are approaching the current market with every belief that the extreme valuations of 2007 represent the sustainable norm to which stocks should return.

With the extreme valuations Dave believes that there's no to place to go but down.

Here and now, extreme valuations matter enormously.

At the most extreme valuations in history.

Nothing could be further from the truth when one starts the clock with extreme valuations and weak structural growth.

If some of your holdings are currently trading at extreme valuations, I believe it would be wise to evaluate the risks associated with holding on.

It may seem implausible that stocks could have gone this long with near - zero returns, and yet still be at valuations where other secular bear markets have started — but that is the unfortunate result of the extreme valuations that stocks achieved in 2000.

Robert Shiller has been writing op - eds for the past few years discussing the extreme valuations and wondering how they persist.

History reports only a small number of extreme valuations, as it must.

Not exact matches

Viewed through this lens, equity valuations are not that extreme, we believe.

As a result of the weak recovery, the economy has lots of spare capacity, interest rates and valuations are well below historical averages, and corporate managements are exercising extreme risk - averse behavior.

When you look back on this moment in history, remember that spectacular extremes in reliable valuation measures already told you how the story would end.

Yet the fact that these 13 years have included three successive approaches (2000, 2007, and today) to valuation peaks - at the very extremes of historical experience - is evidence that investors don't appreciate the link between valuation and subsequent returns.