Stock Market Valuation
Document Type
Oral Presentation
Campus where you would like to present
Ellensburg
Event Website
https://digitalcommons.cwu.edu/source
Start Date
16-5-2019
End Date
16-5-2019
Abstract
This presentation will discuss how highly valued the U.S. stock market, specifically the S&P 500, currently is. The analysis will begin with a discussion of various valuation measures, including the price to earnings ratio (P-E ratio), the cyclically adjusted price to earnings ratio (CAPE ratio), and the earnings yield. A time series of each of these measures extending back through the 20th century will be presented. The relationship between long-term returns and the CAPE ratio will be presented. Explanations for high P-E ratios and high CAPE ratios, other than a highly valued stock market, will be given. The earnings yield, as an alternative to the P-E ratio and CAPE ratio, will be analyzed closely. An assessment of the overall valuation of the stock market based on information gleaned from these three valuation metrics will be given.
Recommended Citation
Tenerelli, Taliesin and Fair, Madeline, "Stock Market Valuation" (2019). Symposium Of University Research and Creative Expression (SOURCE). 210.
https://digitalcommons.cwu.edu/source/2019/Oralpres/210
Department/Program
Economics
Stock Market Valuation
Ellensburg
This presentation will discuss how highly valued the U.S. stock market, specifically the S&P 500, currently is. The analysis will begin with a discussion of various valuation measures, including the price to earnings ratio (P-E ratio), the cyclically adjusted price to earnings ratio (CAPE ratio), and the earnings yield. A time series of each of these measures extending back through the 20th century will be presented. The relationship between long-term returns and the CAPE ratio will be presented. Explanations for high P-E ratios and high CAPE ratios, other than a highly valued stock market, will be given. The earnings yield, as an alternative to the P-E ratio and CAPE ratio, will be analyzed closely. An assessment of the overall valuation of the stock market based on information gleaned from these three valuation metrics will be given.
https://digitalcommons.cwu.edu/source/2019/Oralpres/210
Faculty Mentor(s)
Thomas Tenerelli