Courtesy of Mish.
Relative vs. Absolute Value
As I watch valuations on stocks soar higher and higher into the stratosphere, I keep asking “where is the value?”
The problem for most is confusing “relative” value vs. absolute value. Stocks may be “cheap vs. bonds” but what does that matter if bonds are ridiculously overpriced?
Fair Value Has Three Digits
John Hussman has an interesting post this week entitled Fair Value on the S&P 500 Has Three Digits.
The last time I quoted Hussman, a manager for a prominent investment firm emailed something on the lines of “Mish, please do yourself a favor and stop referring to Hussman“.
Actually, that was likely be good advice. The problem I have with the advice is simple: I happen to agree with Hussman.
Right, wrong, or in between, I say what I believe. I do not say things I disagree with to get blog traffic up, investments up, or page hits up. I say what I believe, and I suspect it has cost me traffic. I upset Republicans and Democrats, equity bulls and bears, and US treasury bulls and bears.
Things are so crazy I have been accused of being a flaming Obama liberal as well as being in Bush’s pocket. Truth be known, I never voted or Obama or Bush, and I have never missed voting in a national election since I was 18. Of course, some people think I am crazy to vote at all and that comment has come up when I mention that I vote.
Life would be so much simpler for me if I was obnoxiously one sided, if I never offended anyone ever, or if I purposely offended everyone all the time.
There’s value in being universally despised, value in being hated by half the people all the time, or in never saying anything to offend anyone (being universally liked). Traffic-wise, those three models make perfect sense.
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