Title

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.

Faculty Mentor(s)

Thomas Tenerelli

Department/Program

Economics

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May 16th, 2:00 PM May 16th, 3:00 PM

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