Tag Archives: Tobin’s Q Ratio

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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Tobin’s Q Ratio and the Shiller, Graham, & Dodd Price-to-Trailing 10-Year Earnings Ratio

Both ratios show that conditions in the US stock market are getting frothy.    Shiller’s ratio is the same as the one created by Benjamin Graham and David Dodd in 1934. It is self-explanatory. If we ignore the outrageous peak in the … Continue reading

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