Jun 01

“By Almost Every Measure Stocks Are Overvalued” Warns Goldman After Slamming Corporate Buybacks (ZeroHedge, June 1, 2015):

Over the weekend, we first reported that none other than Nobel prize winner Robert Shiller said that in his opinion, unlike 1929, this time everything – stocks, bonds and housing – was overvalued. Curiously, none other than Goldman’s chief equity strategist, David Kostin echoed this sentiment when in his latest weekly note to clients he said that “by almost any measure, US equity valuations look expensive. The typical stock in the S&P 500 trades at 18.1x forward earnings, ranking at the 98th percentile of historical valuation since 1976. For the overall index, the aggregate forward P/E multiple equals 17.2x, a rise of 63% since September 2011, compared with the median expansion of 48% during 9 previous P/E expansion cycles. Financial metrics such as EV/EBITDA, EV/Sales, and P/B also suggest that US stocks have stretched valuations. With tightening on the horizon, the P/E expansion phase of the current bull market is behind us.

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One Response to ““By Almost Every Measure Stocks Are Overvalued” Warns Goldman After Slamming Corporate Buybacks”

  1. Marilyn Gjerdrum Says:

    This is no secret to anyone with an ounce of sense.
    Houses that don’t fit the wage levels are ones nobody can afford…yes, they are overvalued.
    Stocks that if one buys today they can never see any gain are overvalued…….

    If the market goes down, I’ll buy Tesla.

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