Tag Archives: CAPE

Counterfactual Friday: The CAPE

Current Market Perspective: Moderately bearish based on three pieces of information: Our bottom-up security selection process is revealing few bargains; Total public and private debt in developed countries is unsustainably high relative to GDP and will require long, painful de-leveraging … Continue reading

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Just What is Seth Klarman up to? It May not be What Optimists Believe

Apparently, Seth Klarman is in the market for capital. This is always news because Klarman has a reputation for shunning capital from new investors and frequently returning excess capital to existing investors. However, the author of the attached story has … Continue reading

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Many Well Known Hedge Funds are Having Bad Years

Where’s the hedging?… With data flowing in now, it is apparent that a large number of hedge funds are in the red this year and several dozen are down by double-digit rates. They include many well-known names that run billions … Continue reading

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Market Valuation, Deus Ex Machina, and Volatility

We have written several times to say that the market in general is overvalued based on earnings (the CAPE) and book value (Tobin’s Q). Even after the recent selloff, the market is still well above long-term averages. However, astute market … Continue reading

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I am a Proud Member of the “I Don’t Know” School

I read the following in Howard Marks’s latest book (p. 138):  “Since the investors of the ‘I Know’ school, described in chapter 14, feel it’s possible to know the future, they decide what it will look like, build portfolios designed … Continue reading

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CAPE Update (Or, was Last Week’s 5.6% Market Pop Justified?)

As of July 1, 2011, the Cyclically Adjusted PE (CAPE) ratio for the S&P 500 is 23.13, which essentially means the average share of common stock in the S&P 500 companies trades for 23.13 times its annual earnings averaged over … Continue reading

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Another Disconnect w/r/t the Market

Narrowly focused company analysts are raising performance expectations for the businesses they follow while broadly focused market strategists and economists are lowering their estimates for market performance. One group is going to be wrong. David Dreman and many other value … Continue reading

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Is the Market Overvalued?

Great investors tend to focus on investing in one company at a time (bottom up) and ignore macroeconomic and macro-market forcasts (top down), but the CAPE and Tobin’s Q ratio are remarkably good at predicting long-run returns for the US … Continue reading

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Greenblatt’s Book, Calandro’s Suggestions, and the CAPE

I am sorry for the dearth of posting. Between tax season and attending the CFA Institute’s  Annual Conference in Edinburgh, I had little time. A review of Greenblatt’s book can be found here: http://post.nyssa.org/nyssa-news/2011/05/book-review-the-big-secret-for-the-small-investor.html Also on the Post, an interesting … Continue reading

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