Sentences with phrase «popular valuation ratio»

The most popular valuation ratio, and one that Graham was fond of, is the ubiquitous price - to - earnings ratio (P / E).

Not exact matches

At Berkshire Hathaway's recent annual shareholders meeting, an investor asked Buffett about the relevance of two popular measures of stock market value: 1) market cap - to - GDP, which Buffett once heralded as «probably the best single measure of where valuations stand at any given moment» and 2) the cyclically - adjusted price - earnings ratio (CAPE), which was made famous by Nobel prize winner Robert Shiller and was seen as accurately predicting the dot - com bubble and the housing bubble.

While current and «forward» P / E ratios are much more popular valuation measures, their reliability hinges on whether the recent record profit margins underlying those earnings will be sustained over time.

Five - Year Forecasts We summarize the valuation ratios, historical returns, historical returns net of valuation changes, and expected returns along with estimation errors for the most popular factors and strategies in Table 2.

The price - to - earnings (P / E) ratio is among the most popular valuation metrics.

Popular metrics of aggregate market valuation, such as Wilshire Total Market Index to U.S. GDP, price to forward earnings ratio, price to book value ratio, price to cash flow ratio, cyclically adjusted price to earnings ratio (CAPE), the ratio of annual forward dividend to price (dividend yield), indicate the U.S. stock market is overvalued by between 10 per cent and 60 per cent.