{"id":6810,"date":"2017-04-06T18:22:43","date_gmt":"2017-04-06T18:22:43","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=6810"},"modified":"2017-04-06T18:22:43","modified_gmt":"2017-04-06T18:22:43","slug":"sp-500-valuation-still-not-unreasonable","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=6810","title":{"rendered":"SP 500 Valuation Still Not Unreasonable"},"content":{"rendered":"

Valuation makes for a poor timing tool, although long-term investors need to keep one eye on the metrics to remain informed.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\nStd Dev<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\nStd Dev<\/td>\n<\/tr>\n
Valuation<\/td>\n<\/td>\n<\/td>\n25-year<\/td>\nover\/under<\/td>\n<\/td>\n<\/td>\n<\/td>\n25-year<\/td>\nover\/under<\/td>\n<\/tr>\n
Measure<\/td>\nDescription<\/td>\nLatest<\/td>\naverage<\/td>\nvalued<\/td>\n<\/td>\nDescription<\/td>\nLatest<\/td>\naverage<\/td>\nvalued<\/td>\n<\/tr>\n
P\/E<\/td>\nForward P\/E<\/td>\n17.5(x)<\/td>\n15.9(x)<\/td>\n0.5<\/td>\n<\/td>\nForward P\/E<\/td>\n16.1(x)<\/td>\n15.8(x)<\/td>\n0.1<\/td>\n<\/tr>\n
CAPE<\/td>\nShiller P\/E<\/td>\n29.0(x)<\/td>\n26.1<\/td>\n0.5<\/td>\n<\/td>\nShiller P\/E<\/td>\n25.9(x)<\/td>\n25.6(x)<\/td>\n0.0<\/td>\n<\/tr>\n
Div Yield<\/td>\nDividend Yield<\/td>\n2.1%<\/td>\n2.0%<\/td>\n(0.2)<\/td>\n<\/td>\nDividend Yield<\/td>\n2.3%<\/td>\n2.0%<\/td>\n(0.5)<\/td>\n<\/tr>\n
P\/B<\/td>\nPrice-to-book<\/td>\n2.9(x)<\/td>\n2.9(x)<\/td>\n(0.1)<\/td>\n<\/td>\nPrice-to-book<\/td>\n2.6(x)<\/td>\n2.9(x)<\/td>\n(0.4)<\/td>\n<\/tr>\n
P\/CF<\/td>\nPrice-to-Cash-Flow<\/td>\n12.2(x)<\/td>\n10.6<\/td>\n0.8<\/td>\n<\/td>\nPrice-to-Cash-Flow<\/td>\n11.2(x)<\/td>\n11.4(x)<\/td>\n(0.1)<\/td>\n<\/tr>\n
EY Spread<\/td>\nEY-BAA yield<\/td>\n1.00%<\/td>\n-0.30%<\/td>\n(0.7)<\/td>\n<\/td>\nEY-BAA yield<\/td>\n0.80%<\/td>\n-0.50%<\/td>\n(0.7)<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nData as of 3\/31\/17<\/td>\n<\/td>\n<\/td>\nData as of \/12\/31\/16<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\nSource: JP Morgan’s “Guide to the Markets”<\/td>\n<\/td>\n\u00a0Source: GTTM<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

Ive always liked this matrix from JP Morgan’s “Guide to the Market” published by Dr. David Kelly’s team.<\/p>\n

While it is always subject to argument, the 25-year time frame for the valuation measures include the late 1990’s large-cap growth and Tech frenzy, and the two bear markets from the decade of the 2000’s.<\/p>\n

“EY” is the SP 500 earnings yield, which can be found weekly on this blog, in the “By the Numbers” segment.<\/p>\n

Corrections can happen at any time and for any reason.<\/p>\n

Thanks for reading.<\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Valuation makes for a poor timing tool, although long-term investors need to keep one eye on the metrics to remain…<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[153],"tags":[],"class_list":["post-6810","post","type-post","status-publish","format-standard","hentry","category-sp-500-valuation"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/6810","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6810"}],"version-history":[{"count":4,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/6810\/revisions"}],"predecessor-version":[{"id":6814,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/6810\/revisions\/6814"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6810"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6810"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6810"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}