Posts Tagged ‘trailing twelve month earnings’

Is the Stock Market Cheap?

Is the Stock Market Cheap? 

Courtesy of Doug Short

Here’s the latest update of my preferred market valuation method using the most recent Standard & Poor’s "as reported" earnings and earnings estimates and the index monthly averages of daily closes for July 2010, which is 1179.80. The ratios in parentheses use the July monthly close of 1101.60. For the latest earnings, see the accompanying table from Standard & Poor’s.


  • TTM P/E ratio = 18.3 (17.1)
  • P/E10 ratio = 21.7 (20.3)

Background 
A standard way to investigate market valuation is to study the historic Price-to-Earnings (P/E) ratio using reported earnings for the trailing twelve months (TTM). Proponents of this approach ignore forward estimates because they are often based on wishful thinking, erroneous assumptions, and analyst bias.

TTM P/E Ratio 
The "price" part of the P/E calculation is available in real time on TV and the Internet. The "earnings" part, however, is more difficult to find. The authoritative source is the Standard & Poor’s website, where the latest numbers are posted on the earnings page. Free registration is now required to access the data. Once you’ve downloaded the spreadsheet, see the data in column D.

The table here shows the TTM earnings based on "as reported" earnings and a combination of "as reported" earnings and Standard & Poor’s estimates for "as reported" earnings for the next few quarters. The values for the months between are linear interpolations from the quarterly numbers.

The average P/E ratio since the 1870′s has been about 15. But the disconnect between price and TTM earnings during much of 2009 was so extreme that the P/E ratio was in triple digits — as high as the 120s — in the Spring of 2009. In 1999, a few months before the top of the Tech Bubble, the conventional P/E ratio hit 34. It peaked around 47 two years after the market topped out.

As these examples illustrate, in times of critical importance, the conventional P/E ratio often lags the index to the point of being useless as a value indicator. "Why the lag?" you may wonder. "How can the P/E be at a record high after the price has fallen so far?" The explanation is simple. Earnings fell faster than price. In fact, the negative earnings of 2008 Q4 (-$23.25) is something…
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Phil's Favorites

Animal Spirits: The Beanie Baby Bubble

 

Animal Spirits: The Beanie Baby Bubble

Courtesy of 

We spoke to David Lau a few weeks ago about how they work with advisors. Check out the whole show here.

On today’s show we discuss:

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Zero Hedge

Iran Says S.Korea To Release $1BN Of Its Frozen Funds After Tanker Seizure

Courtesy of ZeroHedge View original post here.

Iran and South Korea have been engaged for the past two months in intense crisis meetings triggered by the Jan.4 Iranian seizure of the South Korean-flagged tanker MT Hankuk Chemi off the Islamic Republic's southern waters. From the start of the IRGC's capturing the vessel and detaining its crew, Tehran pointed to $7 billion to $10 billion in Iranian assets in Korean banks previousl...



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Digital Currencies

Bridgewater Explains When It Will Invest In Bitcoin

Courtesy of ZeroHedge

Two weeks ago, Bridgewater founder Ray Dalio called Bitcoin "one hell of an invention" adding that:

"I expect Bridgewater to soon offer an alt-cash fund and a storehold of wealth fund in order to better deal with the devaluation of money and credit that we consider to be a major risk and opportunity, and Bitcoin won’t escape our scrutiny.”

And now, after significant attention that his comments received, Senior Portfolio Strategist Jim Haskel sits dow...



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ValueWalk

The Hottest Spots For Prime Homes For Sale

By Jacob Wolinsky. Originally published at ValueWalk.

The latest research by the world’s leading high-net-worth mortgage broker, Enness Global, has revealed how many prime homes are currently listed for sale per sq km for £3m or more, ...



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Kimble Charting Solutions

Is Rising Inflation About To Hit U.S. Economy In Big Way?

Courtesy of Chris Kimble

Inflation seems to be a thing of the past… but current trading in bond and commodity markets tell us that it could become a thing of the future!

Inflation hasn’t been an issue, or even on our radar, since the 1980s. Sure, the 2007 surge in oil prices offered some concern but the financial crisis killed any thoughts of inflation.

So what’s got us concerned about inflation in 2021?

Today we take a look at long-term charts of two potential inflation indicators: Crude Oil ...



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Biotech/COVID-19

6 important truths about COVID-19 vaccines

 

6 important truths about COVID-19 vaccines

For many, distinguishing between fact and fiction is difficult. Olemedia/E+ via Getty Images

Courtesy of Sarah Lynch, Binghamton University, State University of New York and Kanneboyina Nagaraju, Binghamton University, State University of New York

One of the biggest barriers s...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Saturday, 29 August 2020, 05:46:16 PM

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Comment: Low liquidity means price can MOVE fast either way!



Date Found: Saturday, 29 August 2020, 05:52:11 PM

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Comment: if you have 100% of life savings in stocks alone, please adjust for a crash...



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Politics

Why the British abandoned impeachment - and what the US Congress might do next

 

Why the British abandoned impeachment – and what the US Congress might do next

The impeachment trial of Warren Hastings in 1788. Library of Congress

Courtesy of Eliga Gould, University of New Hampshire

Impeachment was developed in medieval England as a way to discipline the king’s ministers and other high officials. The framers of the U.S. Constitution took that idea and applied it to presidents, judges and other federal leaders.

Now that tool is in use, and in question, during ...



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Mapping The Market

The Countries With The Most COVID-19 Cases

 

The Countries With The Most COVID-19 Cases

By Martin Armstrong, Statista, Jan 12, 2021

This regularly updated infographic keeps track of the countries with the most confirmed Covid-19 cases. The United States is still at the top of the list, with a total now exceeding the 22 million mark, according to Johns Hopkins University figures. The total global figure is now over 85 million, while there have been more than 1.9 million deaths.

You will find more infographics at ...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

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