Shiller vs Siegel: The Bull &The Bear On Current Market Valuations

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Shiller vs Siegel: The Bull &The Bear On Current Market Valuations
<a href="https://pixabay.com/users/JoaquinAranoa/">JoaquinAranoa</a> / Pixabay

Two Finance Professors that we follow closely at The Acquirer’s Multiple are Yale Professor of Economics, Robert Shiller and Wharton Professor of Finance, Jeremy Siegel.

Both were interviewed recently by CNBC regarding their outlook on current market valuations. Shiller says, “Current market conditions make the market look dangerous”. While Siegel says, “This is a Goldilocks Situation for Stocks With Everything Moving In Tandem”. I guess we’ll just have to wait and see. Following are both interviews:

Here’s the Shiller video:

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And, here’s the Siegel interview:

This article was originally posted by Johnny Hopkins at The Acquirer’s Multiple.

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The Acquirer’s Multiple® is the valuation ratio used to find attractive takeover candidates. It examines several financial statement items that other multiples like the price-to-earnings ratio do not, including debt, preferred stock, and minority interests; and interest, tax, depreciation, amortization. The Acquirer’s Multiple® is calculated as follows: Enterprise Value / Operating Earnings* It is based on the investment strategy described in the book Deep Value: Why Activist Investors and Other Contrarians Battle for Control of Losing Corporations, written by Tobias Carlisle, founder of acquirersmultiple.com. The Acquirer’s Multiple® differs from The Magic Formula® Earnings Yield because The Acquirer’s Multiple® uses operating earnings in place of EBIT. Operating earnings is constructed from the top of the income statement down, where EBIT is constructed from the bottom up. Calculating operating earnings from the top down standardizes the metric, making a comparison across companies, industries and sectors possible, and, by excluding special items–earnings that a company does not expect to recur in future years–ensures that these earnings are related only to operations. Similarly, The Acquirer’s Multiple® differs from the ordinary enterprise multiple because it uses operating earnings in place of EBITDA, which is also constructed from the bottom up. Tobias Carlisle is also the Chief Investment Officer of Carbon Beach Asset Management LLC. He's best known as the author of the well regarded Deep Value website Greenbackd, the book Deep Value: Why Activists Investors and Other Contrarians Battle for Control of Losing Corporations (2014, Wiley Finance), and Quantitative Value: A Practitioner’s Guide to Automating Intelligent Investment and Eliminating Behavioral Errors (2012, Wiley Finance). He has extensive experience in investment management, business valuation, public company corporate governance, and corporate law. Articles written for Seeking Alpha are provided by the team of analysts at acquirersmultiple.com, home of The Acquirer's Multiple Deep Value Stock Screener. All metrics use trailing twelve month or most recent quarter data. * The screener uses the CRSP/Compustat merged database “OIADP” line item defined as “Operating Income After Depreciation.”

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