It just sucks
the valuations are a little high right now.
Not exact matches
Watch out for
high prices Unusually
high price / earnings
valuations are often a sign that the party for stocks has gone on a
little too long.
Daily - deal pioneer Groupon and social - gaming firm Zynga, which both achieved big
valuations based on
little more than
high expectations,
are tanking.
This
is not to say that we can rule out yet
higher valuations, but with no transformative technologies driving the economy,
little expansion in capital investment, and ongoing retrenchment in consumer balance sheets, I can't help but think that the «virtuous cycle» rhetoric of Ben Bernanke
is an awfully thin gruel by comparison.
Valuations were already so
high it will make
little difference unless much
higher growth emerges.
Still, if you have no idea of how well your investments
are likely to perform, rebalancing does protect you a
little bit on the downside in times of
high valuations.
It
is a
little better at today's
valuations (P / E10 = 16 in a Bear Market) and worse at very
high valuations (P / E10 above 20).
Meanwhile, the
valuation will
be a
little better this time around with the bigger dividend and
higher profit.
Cardinal's 10 - year average P / E ratio has
been 16 instead of 15, meaning that the market has tended to value CAH a
little higher than its historic
valuation of all the companies.
That
's because when stocks have
high multiples and tight spreads, there
's little upside in holding them (future return has
been brought forward to today) but there
's lots of downside due to their equity
valuations tendency to mean revert.
I
'm surprised at the
valuation too — seems a
little high, pricing in some fairly
high growth?
Fortunately, this final stage may present asymmetric risk / reward — I suspect the judge will have
little sympathy for any argument undermining the previous $ 26 million
valuation, while there
's a strong case for a much
higher valuation.
We have found that rebalancing helps a
little bit when
valuations are high.
Based on a 3.0 P /
S ratio, my fair
valuation actually corresponds to a 19 P / E — certainly
high enough in the circumstances, but the market'
s got a
little too excited in the past month or so, and ESCH'
s now looking quite overvalued.
When people start claiming a business deserves a special
valuation above all reasonable fundamental analysis (because of the «franchise», because there
's so
little institutional ownership for a big cap growth stock, because Buffett
's in it, because global expansion will provide endless opportunity, because ROE
is so damned
high, because it
's nearly a monopoly, because Buffett
's in it...), that
's a short, IMO.