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Are Stocks Undervalued Yet?

West Dundee Hawkeye

HR All-American
Sep 28, 2003
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Are Stocks Undervalued Yet?

Everyone wants to know when the stock market, after its recent declines, will be a good value again.

The sobering news is that even at its lowest point in mid-May, the S&P 500 index wasn’t even close to being undervalued according to any of eight valuation models that my research shows have the best long-term track records.

The recent bounce in the S&P 500—up 5.3% since May 19—could be just a passing bear-market rally, or it could be a new bull-market leg.
But if it proves to be the latter, it is all but certain that factors other than undervaluation are helping drive stocks higher.
 
BofA’s US stock chief sees a floor of 3,200 for the S&P 500 (potential downside of 22%)
If you want to know how low the market could really go, pay attention to what Savita Subramanian — head of U.S. equity and quantitative strategy at Bank of America Securities — has to say.
“We calculate that a floor on the market is 3,200, even in a recession case,” she told Bloomberg earlier this week.
The S&P 500 currently sits at roughly 4,100, so that market floor call represents potential downside of around 23%.

I don't follow the market and just googled s&p 500 after seeing op's post and the above came up.
 
I definitely don’t think so. Interest rates rising, gas/food at highest prices ever. Homes at highest prices ever. It’s gonna definitely come crashing down still
 
Are Stocks Undervalued Yet?

Everyone wants to know when the stock market, after its recent declines, will be a good value again.

The sobering news is that even at its lowest point in mid-May, the S&P 500 index wasn’t even close to being undervalued according to any of eight valuation models that my research shows have the best long-term track records.

The recent bounce in the S&P 500—up 5.3% since May 19—could be just a passing bear-market rally, or it could be a new bull-market leg.
But if it proves to be the latter, it is all but certain that factors other than undervaluation are helping drive stocks higher.
Blue horseshoe says start buying on cash flow and yield when dow hits app 30500 or oct pre mid term election, whichever happens first.
 
Not if there’s a recession. In the last week, the JPM CEO said there’s a “hurricane” coming and Elon Musk said TSLA is laying off 10% of the workforce. Not good signs.
 
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There are some very attractive stocks out there that are undervalued right now. However, by virtually all metrics I look at, which is primarily the P/E ratio of the s and p, it is still overvalued. If you assume, as many are, that interest rates, gas prices, etc.. remain high or continue going up, you would have to assume this will hurt earnings and will push that P/E ratio even higher, hence even more over valuation.

Just stick to your plan. Continue dollar cost averaging in every month, even increase your contributions if you can, hold some cash for investments you like and pick a price you are willing to pay. If it hits that price, buy it.
 
There are some very attractive stocks out there that are undervalued right now. However, by virtually all metrics I look at, which is primarily the P/E ratio of the s and p, it is still overvalued. If you assume, as many are, that interest rates, gas prices, etc.. remain high or continue going up, you would have to assume this will hurt earnings and will push that P/E ratio even higher, hence even more over valuation.

Just stick to your plan. Continue dollar cost averaging in every month, even increase your contributions if you can, hold some cash for investments you like and pick a price you are willing to pay. If it hits that price, buy it.

Terrible advice. Times are about to get hard, invest in Beanie Babies.
 
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There is quite a difference between your interpretation that we are in for a hurricane and his statement to investors that he's preparing for a hurricane of undetermined significance.

Good grief...
 
There are some very attractive stocks out there that are undervalued right now. However, by virtually all metrics I look at, which is primarily the P/E ratio of the s and p, it is still overvalued. If you assume, as many are, that interest rates, gas prices, etc.. remain high or continue going up, you would have to assume this will hurt earnings and will push that P/E ratio even higher, hence even more over valuation.

Just stick to your plan. Continue dollar cost averaging in every month, even increase your contributions if you can, hold some cash for investments you like and pick a price you are willing to pay. If it hits that price, buy it.
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I’ve given up on the stock market. Plan on cashing in my retirement before year end and investing in fentanyl suppliers.
 
I'm 61 and am considering temporarily moving about half my portfolio to securities.

Is that a good idea?

Mainly talking about my Thrift Savings Plan.
 
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BofA’s US stock chief sees a floor of 3,200 for the S&P 500 (potential downside of 22%)
If you want to know how low the market could really go, pay attention to what Savita Subramanian — head of U.S. equity and quantitative strategy at Bank of America Securities — has to say.
We calculate that a floor on the market is 3,200, even in a recession case,” she told Bloomberg earlier this week.
The S&P 500 currently sits at roughly 4,100, so that market floor call represents potential downside of around 23%.

I don't follow the market and just googled s&p 500 after seeing op's post and the above came up.
The S&P is around 3760 ish at the moment.

We have a good way to go.
 
Been buying a little apple every month for over a decade. Not stopping.

when somebody else sells a product everybody on the planet wants and more than willing to pay a premium for I will start buying that also.
 
I'm 61 and am considering temporarily moving about half my portfolio to securities.

Is that a good idea?

Mainly talking about my Thrift Savings Plan.
No.

The last I checked, the Real (inflation adjusted) Fed Funds Rate, is lower than when Carter was President. Translation, the Fed has a long ways to go to bring down inflation. The Fed will be making many Fed Fund Rate hikes that will slow down the econ to slow down inflation. This will cause a recession and earnings will take a hit.

I have been all in Cash (money market) since January. I lock my money up for 1 day. Then I reinvest it for another day. $1 in and $1 out plus interest.

QT (quantitative tightening) has just started. The Fed is going to unwind the $9 Trillion of Treasuries and Mortgage Backed Securities (MBS). They may have to sell MBS which will lower the price and raise the mortgage rates. Home prices are about to correct (read: drop). The Boomers have been screwing the Millennials for years. Now they get their revenge.
 
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Generally, no one buys when the market sells off, well because it’s selling off. Same thing no one ever sells when it’s going up, mainly buying going on in bull markets.

But lesson from 2008-2009 & 2020 is market can recover and will recover. It may not be pretty.

But by buying now, at least guarantees you that you aren’t buying at the top.
 
Are Stocks Undervalued Yet?

Everyone wants to know when the stock market, after its recent declines, will be a good value again.

The sobering news is that even at its lowest point in mid-May, the S&P 500 index wasn’t even close to being undervalued according to any of eight valuation models that my research shows have the best long-term track records.

The recent bounce in the S&P 500—up 5.3% since May 19—could be just a passing bear-market rally, or it could be a new bull-market leg.
But if it proves to be the latter, it is all but certain that factors other than undervaluation are helping drive stocks higher.

They appear to be exactly in line with the average returns since 2009 (giant speed bump over the past few years).

So, I'd say they are not "undervalued" at this point.
 
Generally, no one buys when the market sells off, well because it’s selling off. Same thing no one ever sells when it’s going up, mainly buying going on in bull markets.

But lesson from 2008-2009 & 2020 is market can recover and will recover. It may not be pretty.

But by buying now, at least guarantees you that you aren’t buying at the top.
Gotcha. Was thinking the same thing, but fees like there’s still quite a drop coming.
 
Generally, no one buys when the market sells off, well because it’s selling off. Same thing no one ever sells when it’s going up, mainly buying going on in bull markets.

But lesson from 2008-2009 & 2020 is market can recover and will recover. It may not be pretty.

But by buying now, at least guarantees you that you aren’t buying at the top.
For every buyer there is a seller
 
Gotcha. Was thinking the same thing, but fees like there’s still quite a drop coming.
True, my focus right now is accumulating shares rather than be overly concerned about the value of my portfolio. If I can increase my shares at a lower cost, I’m ok with that when I think about it that way.
 
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