The market increased slightly over the past 30 days (including the close on July 1st), however, some valuations went up while others went down.
The current level of the S&P500 is 1340, and the Dow is at 12,583– slight lower than last month. As evidenced below, market valuations did not change much over the last month. I update market valuations on a monthly basis. The point of this article is to measure the stock market based on seven different metrics. This article does not look at the macro picture and try to predict where the economy is headed. It only uses these several metrics which have been very good past indicators of whether the market is fairly valued.
According to a recent interview, Corsair Capital's founder Jay Petschek did not plan to be a hedge fund manager. After holding various roles on Wall Street, Petschek decided to launch the fund in January 1991, when his family and friends were asking him to buy equities on their behalf. He realized the best structure for Read More
1. P/E (TTM) – Fairly Valued 15.0
2. P/E 10 year – Extremely overvalued 23.67
3. P/BV – xtremely overvalued – 3.68 (using numbers discussed above from April)
4. Dividend Yield – Indeterminate/ overvalued 1.72
5. Market value relative to GDP – Moderately Overvalued 97.1
6. Tobins Q – Extremely overvalued 1.19
7. AAII Sentiment – Average
8. GMO – Overvalued