Sentences with phrase «valuation extremes in»

Despite my admitted stumble in the half - cycle since 2009, it's perplexing that the equity market is at the second greatest valuation extreme in the history of the United States, on what are objectively the most durably reliable valuation measures available, but it has somehow become an affront to suggest that this will not end well.

Despite my admitted stumble in the half - cycle since 2009, it's perplexing that the equity market is at the second greatest valuation extreme in the history of the United States, on what are objectively the most durably reliable valuation measures available, but it has somehow become an affront to suggest that this will not end well.

Not exact matches

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.

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.

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.

Along with the steepest equity valuations in U.S. history outside of 1929 and 2000 (on measures that are actually reliably correlated with subsequent market returns), private and public debt burdens have reached the most extreme levels in history.

Even the 4 % annual total return of the S&P 500 in the 15 years since the 2000 peak has been made possible only by driving current valuations to the second most extreme point in U.S. history.

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.

However, the overall market return / risk climate could become consistent with a more neutral or modestly constructive outlook (with an obligatory safety net in either case, given current valuation extremes) if market internals were to improve decisively.

Note that in the 1987 case, the unusually strong 10 - year return reflects a move to the extreme bubble valuations in the late 1990's, which have in turn been followed by 13 years of market returns below Treasury bill yields.

In an extreme case, ExxonMobil could simply go private, removing any need to rely on public markets for funding or valuation.

With the S&P 500 within about 8 % of its highest level in history, with historically reliable valuation measures at obscene levels, implying near - zero 10 - 12 year S&P 500 nominal total returns; with an extended period of extreme overvalued, overbought, overbullish conditions replaced by deterioration in market internals that signal a clear shift toward risk - aversion among investors; with credit spreads on low - grade debt blowing out to multi-year highs; and with leading economic measures deteriorating rapidly, we continue to classify market conditions within the most hostile return / risk profile we identify — a classification that has been observed in only about 9 % of history.

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.

The best place to watch for cracks in this narrative is not valuations; they are already extreme, and are uninformative about near - term outcomes.

Though nearly every morning prompts the phrase «Yup, they're actually going to do this again,» the steepening pitch of this ascent — coupled with record valuation extremes, record overbought extremes, and the most lopsided bullish sentiment in over three decades — now produces the most extreme «overvalued, overbought, overbullish» moment in history.

With valuations extreme, and market action showing both a lack of trend uniformity and a lack of momentum in breadth (advancing issues versus declining issues), we have no willingness to take on market risk here.

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.

Despite the most extreme market valuations in history, I wrote in August 2000 «as long as trend uniformity remains modestly constructive, we have to view the market as being in an extended top formation.

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).

At present, the valuation measures that we find best correlated with actual subsequent S&P 500 total returns are at the most offensive levels in history, matching or eclipsing the 1929 and 2000 extremes.

With valuations extreme, trend uniformity negative, and our breadth momentum overlay still on a negative reversal, there is nothing in our set of tools that allows us to take a constructive market position.

«While emerging - market valuations are «cheap,» they are not so extreme that one can ignore still - poor fundamental trends, in our view,» Sheets says.

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

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.

I've noted before that while the bubble peak in 2000 was the most extreme level of valuation in history on a capitalization - weighted basis, the recent speculative episode has actually exceeded that bubble from the standpoint of speculation in individual stocks.

While the marginal production cost issue undoubtedly makes the current extreme in the gold / XAU ratio less compelling than it might appear otherwise, we do believe that precious metals shares are quite depressed in valuation terms.

But don't imagine for a moment that current valuation extremes will end in something other than tragedy unless investors shift back from risk - aversion to a fresh round of speculation (which we would infer from market internals).

Even the decile with the best relative valuation is at the most extreme level in history.

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

Those opportunities are most likely to coincide with a material, if less extreme, retreat in valuations, coupled with an early improvement in market internals.

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.

At present, we continue to identify one of the most hostile market environments we've observed in a century of historical data, not only because obscene valuations and extreme «overvalued, overbought, overbullish» syndromes are in place, but also because our measures of market internals remain in a deteriorating condition.

The S&P 500 registered a record high after an advancing half - cycle since 2009 that is historically long - in - the - tooth and already exceeds the valuation peaks set at every cyclical extreme in history but 2000 on the S&P 500 (across all stocks, current median price / earnings, price / revenue and enterprise value / EBITDA multiples already exceed the 2000 extreme).

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.

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.

When a large market participant undergoes such an extreme change in its preferences, the impact is bound to show up in prices and valuations.

Well, revenue growth would contribute 4 % annually if the price / revenue ratio was to remain at record extremes, but otherwise, we've also got to consider the effect of the change in valuations.

At the most extreme valuations in history.

Last year, we finally threw up our hands and adapted our approach to require explicit deterioration in market internals before adopting a negative market outlook, regardless of the level of valuations, regardless of the severity of overextended extremes, and with no exceptions.

While valuations remain extreme and market internals convey a signal about growing risk - aversion among investors, we have to allow for the potential for a market collapse just as severe as we observed in 2000 - 2002 and 2007 - 2009.

Vagueness can be avoided, of course, if we go to the logical extreme of such a move, which would lie in attributing to the consequent nature all valuations, reserving to the primordial nature only the constitution of metaphysical possibility and the subjective aim toward value realization in general.

The market's valuation in 2000 was so extreme that the resulting secular bear has the potential to be more extended than others, unless the market was suddenly to collapse to valuations near those where historical secular bulls have started (where stocks have typically been priced to achieve 10 - year prospective returns near 20 % annually).

My goal is to use the historical data to develop an approach to investing that avoids the negatives at both extremes of valuation: (1) being too heavy in stocks at times of overvaluation; and (2) being too light in stocks at times of undervaluation.

My view is that it is best to maintain a moderate position in stocks at times of high valuation and that it is also best not to go too extreme on the high side in one's stock allocation at times of low valuation (because in the short - term stocks may drop sharply even from a starting point at which valuations are low).

* Accounting issues: in one sense this takes the fourth point to an extreme - the stock market's valuation of a company is flawed, not because it's focusing on the wrong metrics but because profits or other key financial data are being flattered or even fabricated by company management.

In the early 1970's, large - cap valuations were extreme relative to small - cap valuations.

Keep in mind, one should not make a bearish allocation shift to a bullish allocation on enticing valuations alone, anymore than one should make a bullish allocation shift to a bearish allocation shift on extreme overvaluation alone.

Equally worthy of note, the very same valuation measures during the bullish peaks in the 20 - year period never approached the mindless extremes that exist at present.

In this article published in the Herald Sun, Roger discusses how when valuations are at extremes, it doesn't take much to trigger something seriouIn this article published in the Herald Sun, Roger discusses how when valuations are at extremes, it doesn't take much to trigger something seriouin the Herald Sun, Roger discusses how when valuations are at extremes, it doesn't take much to trigger something serious.