Comments on: IBES Valuation Model: Stocks Extremely Undervalued http://www.tradersnarrative.com/ibes-valuation-model-stocks-extremely-undervalued-1006.html Freshly squeezed market commentary & analysis Thu, 08 Jan 2009 22:48:31 +0000 http://wordpress.org/?v=2.0.2 by: BAP http://www.tradersnarrative.com/ibes-valuation-model-stocks-extremely-undervalued-1006.html#comment-31480 Sun, 24 Feb 2008 01:56:59 +0000 http://www.tradersnarrative.com/ibes-valuation-model-stocks-extremely-undervalued-1006.html#comment-31480 This valuation model depends on analysts' estimates being right and on the usual cycle of tight/loose money effectively fighting an economic problem. In the past, that has usually worked out pretty well for the model's predictions. But now, in addition to the conditions skewing the T-bill yield mentioned above, you have a different fighting environment for the Fed and for yields and possibly for earnings estimation. The Fed must now fight, not a normal slowdown in the economy, but an unprecedented proliferation of loose money in the form of CDOs, CDSs, and a host of fiat money credit products and their debilitating effects on the economy. In other words, the Fed this cycle finds that it must fight loose money with loose money. This tosses the past yield cycles out as any kind of guide to what the stock market may do. The markets are efficient enough to weigh all these factors and the inflation implications and not go up just because a model of past yield cycles says that it should. This valuation model depends on analysts’ estimates being right and on the usual cycle of tight/loose money effectively fighting an economic problem. In the past, that has usually worked out pretty well for the model’s predictions. But now, in addition to the conditions skewing the T-bill yield mentioned above, you have a different fighting environment for the Fed and for yields and possibly for earnings estimation. The Fed must now fight, not a normal slowdown in the economy, but an unprecedented proliferation of loose money in the form of CDOs, CDSs, and a host of fiat money credit products and their debilitating effects on the economy. In other words, the Fed this cycle finds that it must fight loose money with loose money. This tosses the past yield cycles out as any kind of guide to what the stock market may do. The markets are efficient enough to weigh all these factors and the inflation implications and not go up just because a model of past yield cycles says that it should.

]]> by: Doug http://www.tradersnarrative.com/ibes-valuation-model-stocks-extremely-undervalued-1006.html#comment-22049 Mon, 19 Nov 2007 00:00:26 +0000 http://www.tradersnarrative.com/ibes-valuation-model-stocks-extremely-undervalued-1006.html#comment-22049 Is it possible that there is a new equilibrium established? The trend line since mid 2002 seems to be fairly steady. Perhaps market conditions have changed, and the market is now properly valued (or even under/overvalued). Just a thought. Do you think there's any validity? Doug Is it possible that there is a new equilibrium established? The trend line since mid 2002 seems to be fairly steady. Perhaps market conditions have changed, and the market is now properly valued (or even under/overvalued).

Just a thought. Do you think there’s any validity?

Doug

]]> by: Doug http://www.tradersnarrative.com/ibes-valuation-model-stocks-extremely-undervalued-1006.html#comment-22048 Sun, 18 Nov 2007 23:56:39 +0000 http://www.tradersnarrative.com/ibes-valuation-model-stocks-extremely-undervalued-1006.html#comment-22048 I was looking for information on the q-value when I came across the IBES valuation model, and your site shortly thereafter. It gives me a sense of optimism about the near future of the markets when all I had heard was that the sky was going to fall very soon. Is there a souce of weekly or monthly IBES values/charts? Are you aware of a general rule, i.e. buy at -20 or at when the curve comes back up through the undervalued line? What markets does this take into account, or is it not tied to any? Is there a comparible chart/trend/value for foreign markets? Lots of questions, and I appreciate any assistance you can offer. Thanks. Doug I was looking for information on the q-value when I came across the IBES valuation model, and your site shortly thereafter. It gives me a sense of optimism about the near future of the markets when all I had heard was that the sky was going to fall very soon. Is there a souce of weekly or monthly IBES values/charts? Are you aware of a general rule, i.e. buy at -20 or at when the curve comes back up through the undervalued line? What markets does this take into account, or is it not tied to any? Is there a comparible chart/trend/value for foreign markets? Lots of questions, and I appreciate any assistance you can offer.

Thanks.
Doug

]]> by: Funds Zine http://www.tradersnarrative.com/ibes-valuation-model-stocks-extremely-undervalued-1006.html#comment-8602 Tue, 26 Jun 2007 16:19:41 +0000 http://www.tradersnarrative.com/ibes-valuation-model-stocks-extremely-undervalued-1006.html#comment-8602 <strong>Investing For Simple People #1, Investing...</strong> This is the second part of the blog carnival, the first part had Miscellaneous and Education carnival categories. Investing Moneywalks supports me in my opinion that the sooner you start investing towards your retirement the better in his Time is ... Investing For Simple People #1, Investing…

This is the second part of the blog carnival, the first part had Miscellaneous and Education carnival categories.

Investing
Moneywalks supports me in my opinion that the sooner you start investing towards your retirement the better in his Time is …

]]> by: Matt's Creative Advertising Blog http://www.tradersnarrative.com/ibes-valuation-model-stocks-extremely-undervalued-1006.html#comment-8393 Fri, 22 Jun 2007 22:27:51 +0000 http://www.tradersnarrative.com/ibes-valuation-model-stocks-extremely-undervalued-1006.html#comment-8393 <strong>carnival of wealth building ideas - June 12, 2007...</strong> Welcome to the June 12, 2007 edition of carnival of wealth building ideas. John Wesley presents The Amazing Effects of a Weekend Without Televsion posted at Pick the Brain. Patrick Daly presents How Much Should a Web Freelancer Charge Clients? poste... carnival of wealth building ideas - June 12, 2007…

Welcome to the June 12, 2007 edition of carnival of wealth building ideas.
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Patrick Daly presents How Much Should a Web Freelancer Charge Clients? poste…

]]> by: Babak http://www.tradersnarrative.com/ibes-valuation-model-stocks-extremely-undervalued-1006.html#comment-7630 Thu, 07 Jun 2007 20:36:15 +0000 http://www.tradersnarrative.com/ibes-valuation-model-stocks-extremely-undervalued-1006.html#comment-7630 Johan, you were expecting it to pinpoint every single top and bottom with 100% accuracy? :-) Buffett side stepped the mania and he made out all right. Remember, the most important rule is don't lose money. Bubbles may be fun but most people lose a lot of money in them. If you avoid the ride up and the ride down, consider yourself lucky! Johan,
you were expecting it to pinpoint every single top and bottom with 100% accuracy? :-)
Buffett side stepped the mania and he made out all right. Remember, the most important rule is don’t lose money. Bubbles may be fun but most people lose a lot of money in them. If you avoid the ride up and the ride down, consider yourself lucky!

]]> by: Johan http://www.tradersnarrative.com/ibes-valuation-model-stocks-extremely-undervalued-1006.html#comment-7623 Thu, 07 Jun 2007 18:50:18 +0000 http://www.tradersnarrative.com/ibes-valuation-model-stocks-extremely-undervalued-1006.html#comment-7623 "it repeatedly signalled caution during the bubble years" and that means you just missed like 150% gain in a few years. Have you really looked through this indicator? I'm not very impressed. But thanks a lot for sharing this info any way! Johan “it repeatedly signalled caution during the bubble years”

and that means you just missed like 150% gain in a few years. Have you really looked through this indicator?

I’m not very impressed.

But thanks a lot for sharing this info any way!

Johan

]]> by: Prospectus http://www.tradersnarrative.com/ibes-valuation-model-stocks-extremely-undervalued-1006.html#comment-7607 Thu, 07 Jun 2007 07:26:28 +0000 http://www.tradersnarrative.com/ibes-valuation-model-stocks-extremely-undervalued-1006.html#comment-7607 Another factor affecting the equation is huge demand from foreign centrl banks for US Treasurys over the past few years. That has artificially lowered rates (and is linked to the currency valuation mentioned above). When that game unwinds, watch out, world. Another factor affecting the equation is huge demand from foreign centrl banks for US Treasurys over the past few years. That has artificially lowered rates (and is linked to the currency valuation mentioned above). When that game unwinds, watch out, world.

]]> by: Brian http://www.tradersnarrative.com/ibes-valuation-model-stocks-extremely-undervalued-1006.html#comment-7605 Thu, 07 Jun 2007 04:36:34 +0000 http://www.tradersnarrative.com/ibes-valuation-model-stocks-extremely-undervalued-1006.html#comment-7605 In my opinion, mainly through the increasing amount of trade done with a country with a managed currency that is arguably undervalued. In recent years, Chinese imports have helped keep the costs of businuesses, consumer goods, and inflation rates low. This has allowed the U.S. economy more room to grow without the need to raise interest rates. In other words, I think that the rates in recent years are lower than what they normally would be in the past, when all of the major U.S. trading partners had freely convertible currencies. In my opinion, mainly through the increasing amount of trade done with a country with a managed currency that is arguably undervalued.

In recent years, Chinese imports have helped keep the costs of businuesses, consumer goods, and inflation rates low. This has allowed the U.S. economy more room to grow without the need to raise interest rates.

In other words, I think that the rates in recent years are lower than what they normally would be in the past, when all of the major U.S. trading partners had freely convertible currencies.

]]> by: Babak http://www.tradersnarrative.com/ibes-valuation-model-stocks-extremely-undervalued-1006.html#comment-7587 Wed, 06 Jun 2007 19:54:17 +0000 http://www.tradersnarrative.com/ibes-valuation-model-stocks-extremely-undervalued-1006.html#comment-7587 joe, you're welcome. :-) Brian, possibly but how are the rates "artificial"? joe, you’re welcome. :-)

Brian, possibly but how are the rates “artificial”?

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