Stock bubble? No way, says Alan Greenspan
Former Federal Reserve chairman Alan Greenspan says the stock market has room to rise from record levels.
“In a sense, we are actually at relatively low stock prices,” Mr Greenspan, who guided the central bank for more than 18 years, told Bloomberg Television overnight. “So-called equity premiums are still at a very high level, and that means that the momentum of the market is still ultimately up.”
The Standard & Poor’s 500 Index advanced 23 per cent this year through yesterday, pulling within a percentage point of its 23.5 per cent surge in 2009, amid speculation the Fed will delay cuts to its monthly bond purchases until the labour market improves.
Mr Greenspan said the stock market was “just barely above 2007” and the average annual increase in stock prices “throughout the postwar period” was 7 per cent, which leaves room for a rise.
“Price-earnings ratios are not hugely up,” he said. The market has “gone up a huge amount, but it’s not bubbly,” according to Mr Greenspan.
Mr Greenspan, 87, served at the Fed during an era dubbed the “Great Moderation” for its economic stability. In a December 1996 speech, after seven straight quarters of gains in the S&P 500, Mr Greenspan posed a question about how the Fed can know “when irrational exuberance has unduly escalated asset values.”
In the final years of Greenspan’s term, which lasted from 1987 to 2006, a massive housing bubble developed as home prices more than doubled between 2000 and 2006, according to the S&P/Case-Shiller home price index.
Mr Greenspan said today’s housing market doesn’t show the same conditions as it exhibited leading up to the housing crash, and is lending stability to the US economy.
“The level of construction has come up quite substantially, but it’s still only a third of where we were at the previous top,” Mr Greenspan said. “While housing has been a major contributor to what stability we have in the economy, it has not moved considerably.”
Purchases of new US homes rose in August, capping the weakest two months this year, showing the fallout from mortgage rates at a two-year high is cooling the real-estate rebound. Sales increased 7.9 per cent to a 421,000 annualised pace following a 390,000 rate in the prior month that was less than previously estimated, Commerce Department data showed September 25.
Mr Greenspan also praised Fed vice-chairman Janet Yellen, whom President Barack Obama has nominated as the next head of the central bank, both in the Bloomberg interview and in an earlier interview on CNBC.
“She’s a very bright lady,” Mr Greenspan said of Ms Yellen on CNBC. “I think she will surprise everybody, I mean in a positive way.”
Bloomberg
Read more: http://www.smh.com.au/business/markets/stock-bubble-no-way-says-alan-greenspan-20131024-2w2ky.html#ixzz2ih57UwLr
Related:
Equity valuations relative to bond market
http://myinvestingnotes.blogspot.com/2010/07/equity-valuation-s-500-relative-to-bond.html
When is the market over-valued?
http://myinvestingnotes.blogspot.com/2009/07/when-is-market-over-valued.html
Showing posts with label market PE. Show all posts
Showing posts with label market PE. Show all posts
Friday 25 October 2013
Thursday 25 July 2013
Invest like Buffett - The Limited 20 Holes Punch Card of His Investing (The Buffett Way)
When opportunity comes within your strike zone/buying zone ONLY then invest(Science Of hitting-Ted Williams)
Historical PE ratio & S&P 500
Friday 14 June 2013
Global Stock Market Indices PE Ratio At a Glance – 8 June 2013
Market Indices PE Ratio for Major Stock Exchange globally.
May 2013 Month Global PE Ratio.
US: Dow Jones Industrial, S&P500, NASDAQ, Russel 2000
Europe: FTSE100, CAC40, DAX
Asia: KLCI, STI, HangSeng, ASX200, CSI 300, JCI, SET, KOPSI, NIKKEI 225, SENSEX
Ref: My Stocks Investing Journey
May 2013 Month Global PE Ratio.
US: Dow Jones Industrial, S&P500, NASDAQ, Russel 2000
Europe: FTSE100, CAC40, DAX
Asia: KLCI, STI, HangSeng, ASX200, CSI 300, JCI, SET, KOPSI, NIKKEI 225, SENSEX
Ref: My Stocks Investing Journey
Sunday 9 June 2013
The Market P/E of KLCI on 7.6.2013 was 16.2.
7.6.2013
KLCI (30 Component Stocks)
KLCI (30 Component Stocks)
|
| Stock Code | Stock Name | Earnings | Dividend | BV | ROE | No of shares |
| 1015 | AMBANK | 1642.3 | 670.1 | 12026.6 | 13.7% | 3014.2 |
| 6888 | AXIATA | 2562.4 | 2971.4 | 20127.8 | 12.7% | 8528.7 |
| 4162 | BAT | 799.0 | 783.3 | 485.4 | 164.6% | 285.5 |
| 1023 | CIMB | 4439.0 | 1802.2 | 29092.5 | 15.3% | 7615.8 |
| 6947 | DIGI | 1206.3 | 2033.3 | 233.3 | 517.2% | 7775.0 |
| 5398 | GAMUDA | 589.7 | 272.9 | 4354.8 | 13.5% | 2233.2 |
| 4715 | GENM | 1471.3 | 514.7 | 13775.0 | 10.7% | 5937.5 |
| 3182 | GENTING | 4003.2 | 310.7 | 21833.4 | 18.3% | 3719.5 |
| 5819 | HLBANK | 1869.3 | 716.7 | 12257.0 | 15.3% | 1879.9 |
| 1082 | HLFG | 1169.7 | 268.5 | 8495.8 | 13.8% | 1052.8 |
| 1961 | IOICORP | 1788.2 | 990.5 | 12671.4 | 14.1% | 6432.2 |
| 2445 | KLK | 1211.0 | 686.6 | 7130.9 | 17.0% | 1067.5 |
| 6012 | MAXIS | 1854.6 | 2987.2 | 7050.7 | 26.3% | 7500.7 |
| 1155 | MAYBANK | 6297.8 | 5622.7 | 43433.2 | 14.5% | 8686.6 |
| 5186 | MHB | 241.8 | 157.8 | 2512.0 | 9.6% | 1600.0 |
| 3816 | MISC | 0.0 | 0.0 | 22319.0 | 0.0% | 4463.8 |
| 2194 | MMCCORP | 923.3 | 137.4 | 7034.1 | 13.1% | 3045.1 |
| 1295 | PBBANK | 3894.3 | 1739.2 | 18083.5 | 21.5% | 3531.9 |
| 5183 | PCHEM | 3520.0 | 1742.4 | 20320.0 | 17.3% | 8000.0 |
| 5681 | PETDAG | 836.4 | 1037.2 | 4808.3 | 17.4% | 993.5 |
| 6033 | PETGAS | 1403.0 | 1006.8 | 9161.5 | 15.3% | 1978.7 |
| 4065 | PPB | 844.0 | 244.3 | 14273.4 | 5.9% | 1185.5 |
| 1066 | RHBCAP | 1977.1 | 560.3 | 15114.9 | 13.1% | 2494.2 |
| 4197 | SIME | 4162.8 | 2110.1 | 26021.0 | 16.0% | 6009.5 |
| 5347 | TENAGA | 4311.6 | 1117.6 | 36904.3 | 11.7% | 5617.1 |
| 4863 | TM | 1264.9 | 793.5 | 6904.4 | 18.3% | 3577.4 |
| 4588 | UMW | 948.8 | 583.9 | 4801.7 | 19.8% | 1168.3 |
| 4677 | YTL | 1263.8 | 222.9 | 13423.7 | 9.4% | 10739.0 |
| 6742 | YTLPOWR | 1239.3 | 345.8 | 9539.5 | 13.0% | 7338.1 |
| SUM | 57,735.0 | 32,429.8 | 404,189.0 |
| KLCI 30 COMPONENT STOCKS | RM (m) | ||||||||||||||||||||||||||||||||||||||||||||||
| TOTAL MARKET CAP | 934,167.9 | ||||||||||||||||||||||||||||||||||||||||||||||
| TOTAL EARNINGS | 57,735.0 | ||||||||||||||||||||||||||||||||||||||||||||||
| TOTAL DIVIDENDS | 32,429.8 | ||||||||||||||||||||||||||||||||||||||||||||||
| TOTAL BOOK VALUES | 404,189.0 | ||||||||||||||||||||||||||||||||||||||||||||||
| |||||||||||||||||||||||||||||||||||||||||||||||
Monday 14 January 2013
KLSE Market PE is 16.6 (11.1.2013)
| KLCI | 11.1.2013 | ||||||||
| Index Stock | Price | Mkt. Cap | Earnings | Dividends | Equity | ||||
| Stock Name | RM | RM (m) | RM (m) | RM (m) | RM (m) | ||||
| AMMB | 6.64 | 20014.2 | 1527.8 | 600.4 | 11152.5 | ||||
| CIMB | 7.66 | 56935 | 4037.9 | 1651.1 | 25940.4 | ||||
| RHB | 7.9 | 19704.2 | 1713.4 | 630.5 | 12944.9 | ||||
| HLFG | 14.42 | 15180.9 | 1167.8 | 258.1 | 8495.8 | ||||
| MBB | 9 | 75960.7 | 5798.5 | 3038.4 | 36967.5 | ||||
| PBB | 16.2 | 57217.2 | 3510.3 | 1716.5 | 14975.4 | ||||
| IOI | 5.05 | 32475.5 | 1794.2 | 1006.7 | 12668.7 | ||||
| MMC | 2.63 | 8008.5 | 333.7 | 120.1 | 6211.9 | ||||
| KLK | 22.48 | 23997.5 | 1212.0 | 695.9 | 7130.9 | ||||
| GENTING | 9.51 | 35372.3 | 2875.8 | 283.0 | 17741.9 | ||||
| PPB | 13 | 15411.5 | 981.6 | 277.4 | 14060.0 | ||||
| BAT | 60.9 | 17388.8 | 718.5 | 782.5 | 431.2 | ||||
| SIME | 9.59 | 57630.8 | 4146.1 | 2074.7 | 26021.0 | ||||
| UMW | 12.4 | 14486.8 | 503.0 | 362.2 | 4264.3 | ||||
| YTL | 1.81 | 19395 | 1259.4 | 213.3 | 13394.3 | ||||
| GENM | 3.61 | 21434.3 | 1498.9 | 514.4 | 12528.1 | ||||
| TM | 5.82 | 20820.5 | 1189.7 | 707.9 | 6975.9 | ||||
| AIRASIA | 2.89 | 8033.9 | 565.8 | 136.6 | 4058.6 | ||||
| UEMLAND | 2.15 | 9307.1 | 313.4 | 0.0 | 4848.3 | ||||
| PETCHEM | 13 | 49840 | 2637.0 | 1295.8 | 9623.0 | ||||
| MHB | 4.4 | 7040 | 206.5 | 161.9 | 2432.0 | ||||
| ARMADA | 3.82 | 11189.4 | 428.7 | 78.3 | 3544.3 | ||||
| TENAGA | 6.92 | 38349.9 | 4261.1 | 1112.1 | 36410.2 | ||||
| PETDAG | 22.96 | 22809.7 | 655.5 | 798.3 | 4778.5 | ||||
| HLBANK | 14.98 | 49128.8 | 2532.4 | 2996.9 | 3542.0 | ||||
| MAXIS | 6.55 | 49128.8 | 2532.4 | 2996.9 | 8100.6 | ||||
| PETGAS | 18.98 | 37556.3 | 1082.3 | 788.7 | 8884.5 | ||||
| YTLPOWER | 1.6 | 11740.7 | 1249.0 | 340.5 | 9539.3 | ||||
| AXIATA | 6.69 | 56920.8 | 2381.6 | 1593.8 | 19399.0 | ||||
| DIGI | 5.17 | 40196.8 | 1252.2 | 1366.7 | 1399.5 | ||||
| 902675.9 | 54366.7 | 28599.8 | 348464.7 | ||||||
| Market PE | 16.60 | ||||||||
| DY | 3.17% | ||||||||
| DPO | 0.53 | ||||||||
| Mkt cap/BV | 2.6 | ||||||||
| ROE | 15.6% | ||||||||
| EY | 6.02% | ||||||||
| Risk free int. | 3.40% | ||||||||
| ERP | 2.62% | (Fairly valued) | |||||||
| KLCI | |||||||||
| 11.1.2013 | 1682.7 | ||||||||
Related:
KLSE Market PE is 17.7 (19.10.12)
Friday 26 October 2012
KLSE Market PE is 17.7 (19.10.12)
| KLCI | 19.10.12 | ||||
| Index Stock | M.Cap | Earnings | Dividends | Equty (BV) | |
| Stock Name | Price | (RM m) | (RM m) | (RM m) | (RM m) |
| AMBANK | 6.44 | 19411.3 | 1528.4 | 601.8 | 11152.5 |
| AXIATA | 6.68 | 56828.1 | 2377.7 | 1591.2 | 19396.4 |
| BAT | 64.00 | 18273.9 | 719.4 | 785.8 | 431.1 |
| CIMB | 7.62 | 56637.7 | 4016.9 | 1642.5 | 25940.4 |
| DIGI | 5.48 | 42607.0 | 1253.1 | 1363.4 | 1399.5 |
| GAMUDA | 3.43 | 7139.1 | 549.2 | 249.9 | 4058.7 |
| GENM | 3.59 | 21315.5 | 1501.1 | 511.6 | 12528.1 |
| GENTING | 8.75 | 32545.5 | 2880.1 | 292.9 | 17741.9 |
| HLBANK | 14.20 | 26694.7 | 1866.8 | 720.8 | 2312.3 |
| HLFG | 12.84 | 13517.5 | 1165.3 | 256.8 | 8495.8 |
| IOICORP | 5.06 | 32530.5 | 1787.4 | 1008.4 | 11122.1 |
| KLK | 21.42 | 22865.9 | 1577.0 | 914.6 | 7088.2 |
| MAXIS | 6.87 | 51528.5 | 2525.9 | 2988.7 | 8100.6 |
| MAYBANK | 9.09 | 75142.9 | 5692.6 | 3005.7 | 36207.5 |
| MHB | 4.74 | 7584.0 | 206.6 | 159.3 | 2432.0 |
| MISC | 4.23 | 18881.8 | 0.0 | 0.0 | 22318.9 |
| MMCCORP | 2.70 | 8221.7 | 334.2 | 123.3 | 6212.0 |
| PBBANK | 14.88 | 52555.0 | 3503.7 | 1681.8 | 14975.3 |
| PCHEM | 6.56 | 52480.0 | 2637.2 | 1259.5 | 20080.0 |
| PETDAG | 22.24 | 22094.4 | 655.6 | 795.4 | 4778.5 |
| PETGAS | 19.70 | 38981.0 | 1079.8 | 779.6 | 8864.7 |
| PPB | 12.60 | 14937.3 | 982.7 | 268.9 | 14060.0 |
| RHBCAP | 7.48 | 16723.5 | 1534.3 | 568.6 | 11603.6 |
| SIME | 9.79 | 58832.6 | 4143.1 | 2118.0 | 26021.0 |
| TENAGA | 6.96 | 38348.4 | 504.6 | 230.1 | 30469.3 |
| TM | 6.05 | 21643.3 | 1189.2 | 692.6 | 6975.9 |
| UMW | 10.08 | 11776.4 | 503.3 | 365.1 | 4264.3 |
| YTL | 1.79 | 19033.9 | 1252.2 | 209.4 | 13291.8 |
| YTLPOWR | 1.63 | 11956.2 | 1245.4 | 346.7 | 9535.6 |
| TOTAL | 871087.6 | 49213.0 | 25532.2 | 361858.0 | |
| Market PE | 17.7 | ||||
| Market DY | 2.9% | ||||
| Mark cap/BV | 2.4 | ||||
| ROE | 13.6% | ||||
| Earnings Yield | 5.6% | ||||
| Risk free interest | 3.5% | ||||
| Equity Risk Premium | 2.1% | (Fairly Priced) | |||
| KLCI | |||||
| 19.10.2012 | 1666.35 | ||||
Thursday 25 October 2012
KLSE Market PE is 17.7 (20.10.2012)
|
| Market PE | 17.7 |
| Market DY | 2.9% |
KLCI 1,666.35 19.10.2012 |
Adopted from the Star Newspaper 20.10.2012
Wednesday 9 May 2012
KLSE Market P/E Ratio
As at 6th Jan 2012, our local market is valued at a P/E (Price per earning) of about 14.8x on 2012 earnings. In the other words, it is currently lower than the 10-year average P/E ratio of 16.7x. So, it would be good opportunity for investor to make own assessment and decision in the present market condition.
P/E ratio is commonly used by stock traders to value a company. It reflects whether a company’sshare price is overvalued or undervalued.
PE (Price per earning) = Current share price / EPS
It’s crucial for us to focus on individual stock using the market P/E ratio. It can prevent investor from being traded into a bubble situation which is the riskiest environment for an investor to indulge in.
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