Tag Archives | Forecast

Valuation estimate of SP500 2015 returns : 2,246 target

Download article as PDF The RecessionALERT Valuation Index (RAVI) is a multifactor valuation model that examines cyclically adjusted trailing SP-500 earnings (various multi-decade horizons), the SP-500 total-return index level, total stock market capitalization, Gross Domestic Product, non-financial corporate equities and liabilities, non-financial corporate business net-worth and percentage of investors’ allocation to stocks versus cash and bonds […]

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RecessionALERT Valuation Index (RAVI)

Download article as PDF PART-1 There are currently 4 mainstream models used to forecast 10-year total returns on the SP-500 (dividends re-invested) The Shiller CAPE ratio (PE10) The Warren Buffet Indicator Tobin’s Q-Ratio Average Investor allocation to stocks The non-linear quarterly correlations between these four models (x-axes) and achieved 10-year future total returns (y-axes) on the […]

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Valuations not at nose-bleed levels yet

Download article as PDF The recent run in the major U.S stock indices has resulted in Shiller-PE charts being trotted out showing how far we are off the historical mean, implying a nasty pullback is in the works. The problem with a historical mean is that it is a single horizontal value on a chart […]

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ECRI WLI Growth Conundrum

Download article as PDF More recently, ECRI has switched from the use of smoothed 6-month growth rates (as calculated by their WLIg growth metric) to  annual (52-week) growth numbers of its Weekly Leading Index (WLI) to prop up a recession scenario. The reason cited is “…a wide­spread sea­sonal adjust­ment prob­lem that  econ­o­mists have known about for some time.”  […]

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