Taking last Friday's US large cap market close and using current and projected next twelve month's earnings, the justification for a well above average P/E ratio rests on no negative impacts to the key inputs of earnings, growth of earnings, and an appropriate discount rate. If, however, an exogenous event were to occur with the global economy limping along at just above stall speed, what are the odds that such an impact were to occur - specifically to earnings and its growth rate? And, therefore, shouldn't such a risk give one pause to the justification of an above average valuation level for equities?
Tuesday, March 8, 2016
Tuesday, March 1, 2016
Thursday, February 25, 2016
Tomorrow's appearance on Bloomberg radio will cover my recent travels and events (8 events over a 6 week span) plus the key dynamic impacting the global economy and markets: an excess supply of just about everything and an insufficient demand to meet that supply.
To listen, "click here."
Posted by Vinny Catalano, CFA at 4:07 PM