I have found Professor Robert Shiller's P / E10 to be the best single
measure of valuation so far.
[I have found Professor Robert Shiller's P / E10 to be the best single
measure of valuation so far.
Not exact matches
So if we look at a range
of market
valuation measures, whether it's Shiller CAPE, whether its price - to - book, whether it's price - to - trailing earnings, price - to - peak earnings, when we look at these
measures, they look like they're in the, what we would call, the 10th decile, meaning generally,
valuations are cheaper 90 %
of the time.
Since 1980, tech companies have gone public with average price - to - sales ratios
of 5.8,
so by that
measure valuations aren't out
of whack.
There will always be conceptual issues with any single
valuation measure,
so the best we can do is evaluate
valuations from the standpoint
of multiple historically reliable approaches.
This makes it a conservative
measure of market
valuation,
so very high levels properly merit concern.
It has been our most successful
measure of valuations for calculating Safe Withdrawal Rates
so far.
His
measure of valuation P / E10, which is the best that I have found
so far, is still at 1929 levels, around 27.
The high past performance
of many
of the increasingly popular factor tilt and
so - called smart beta2 strategies came, in large
measure, from rising
valuations.
Both the gross profitability and simple value B / P factors provide an interesting conundrum, appearing stretched on one
measure of valuation but less
so on the other.
I'll be sure to keep a hard - coded file & populate it with all the original share prices &
valuations (at the time
of posting),
so we can properly
measure TGISVP performance later in the year].
However, they did manage a resource upgrade,
so that helps... I'm still comfortable with my long - term $ 150 per proved oz in - the - ground gold
valuation,
so in this instance I'll apply a 50 % discount to their 32 K
of measured oz & a 75 % discount to their 148 K
of identified oz (ignoring inferred resources, at this point).
This is the best
measure of valuation that I have found
so far.