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Currently, S&P has the S&P 500 Index earning about $140.00 per share TTM through March. $140.00 X 20 = 2,800.00. The mutiple of 20 represents a 5% earnings yield. The market closed Friday at 2,305. 2,305 / 20 = $115.25 earnings per share. So, if you think that the S&P 500 Index will not generate at least $115.00 in earnings over the next 12 months then the Index is over valued at the 2305 level on a TTM analysis. Taking that Morningstar has stocks in general selling at 28% below their fair value then the Index is a steal at the 2,305 level. 2,305 X 1.28 = 2,950 fair value for the Index.
With this, Old_Skeet plans on to keep buying equities ... especially, the good dividend paying ones.
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Currently, S&P has the S&P 500 Index earning about $140.00 per share TTM through March. $140.00 X 20 = 2,800.00. The mutiple of 20 represents a 5% earnings yield. The market closed Friday at 2,305. 2,305 / 20 = $115.25 earnings per share. So, if you think that the S&P 500 Index will not generate at least $115.00 in earnings over the next 12 months then the Index is over valued at the 2305 level on a TTM analysis. Taking that Morningstar has stocks in general selling at 28% below their fair value then the Index is a steal at the 2,305 level. 2,305 X 1.28 = 2,950 fair value for the Index.
With this, Old_Skeet plans on to keep buying equities ... especially, the good dividend paying ones.