National Bureau of Economic Research’s Post

P/E ratio, or Price-to-Earnings ratio, measures a company's stock price relative to its earnings per share. It's a critical tool for investors assessing the attractiveness of a stock. Want to learn how to leverage P/E ratio in your investment decisions? Reach out today! #PERatio #StockValuation #InvestmentMetrics #FinancialAnalysis #ConsciousMoney

"Relative Value" is a key concept in investing This example looks at the stock/bond ratio, and shows a relative valuation indicator to help navigate the twists and turns in this "third asset" -- details: https://lnkd.in/gpwJxZMV

1. First, I apologize for one paragraph in my post dated 3/22/24. I wrote this next paragraph referring to the Magnificent Seven performance as the 2024 performance. I changed the first sentence of this paragraph to 2023, where I incorrectly said it was 2024. Item # 2 is the paragraph I am referring to. 2. According to an article on Investors.com, the Magnificent Seven stocks performed exceptionally well in 2023. Apple's stock prices increased by 48.2%, Microsoft's was up 56.8%, Alphabet [Google holding company] increased by 58.3%, Amazon's was higher by 80.9%, Nvidia's was up 238.9%, and Meta [Facebook and Instagram holding company] gained 194.1%, and Tesla's was up 101.7%. In comparison, the S&P 500 was up 24.2%. Additionally, a Reuters article states that the Magnificent Seven stocks saw a 39.5% increase in earnings. The article questions whether this impressive performance can continue into 2024. 3. Investing in oil for 2024 is a lower-risk option with higher dividend yields than the S&P 500. Ticker USO has gained 15% but has no dividend. That is an easy way to buy oil. Pioneer Natural Resources [ticker PXD] is up 11.33% and has a dividend yield of 4.28%. 4. Per the Factset Earnings Insight Report dated March 21, 2024, 111 companies of the S&P 500 have issued guidance, out of which 78 companies have issued negative (downward) EPS guidance, and 33 companies have issued positive (upward) EPS guidance. The report suggests an overall Q1 2024 earnings increase of 3.4% is expected, making it the third quarter of year-over-year earnings growth for the S&P 500. Factset's Earnings Insight Report can be found at: https://lnkd.in/gqtyPcsX. 5. According to Factset's Earnings Insight Report, six of eleven sectors are expected to report an increase in earnings compared to the previous year. The Utilities, Information Technology, Communication Services, and Consumer Discretionary sectors are expected to lead the growth. On the other hand, four sectors are predicted to decline year-over-year earnings. The Energy, Materials, and Industrial sectors are expected to lead the decline. 6. Factset's report shows that 78 companies have issued negative guidance, above the five-year average of 62. However, the expected earnings decrease is only 2.6%, lower than the five-year average of 3.7%. 7. Factset predicts the S&P 500's earnings growth in 2024 will be 11%. They also expect the forward PE ratio to be 20.9, higher than the 10-year average of 17.7. This year's future equity market direction will be heavily influenced by the tone set by most S & P 500 companies' earnings reports.

As the stock market reacts to Biden’s announcement, the latest Fed expectations and Q2 earnings, our senior portfolio manager of systematic equities Sumali Sanyal shares her take with The Wall Street Journal. She says earnings growth will be a crucial factor in determining whether the latest rotation into #smallcap will persist. Check out the full story here: https://lnkd.in/eTNEGD2U

I know, you know, we all know the PRICE of the stock market, yet no one knows the actual VALUE of the stock market at any given time. That value is derived from all market participants buying and selling their shares. You have no control over the direction of the markets, and news is unpredictable. You cannot predict where the value of your investments will be tomorrow, so best not to try. Instead of trying to buy the "best stock", I prefer to invest in capitalism as a whole. https://lnkd.in/e8rByfsh

What is remarkable about Stock Markets over the last decade is not necessarily the dominance of the US Markets but the dominance of big shares within that market. In theory, the big shares should underperform as the medium and small shares grow at a faster pace. #stockmarkets

Credit to Charles-Henry Monchau, CFA, CMT, CAIA 150,000+ followers in LinkedIn February 26, 2024 Annualized Stock Market Returns, "1963 N 2023: Ranked by Share Buybacks VS. Share Issuance https://lnkd.in/ggmPcxAv A SIMPLE INVESTMENT STRATEGY -> BUY THE STOCK REPURCHASERS, AVOID THE STOCK ISSUERS. One of the better strategies from 1963-2023 was simply avoiding companies who issue stock. They are on.the righthand side of this table, primarily in red. Stock repurchasers are on the left of the table, primarily in green. Source: Jeff Weniger

https://lnkd.in/gqzp5-Fv Watch this video to check the valuation of the stock by the most easiest method.

At Polen, we believe it is crucial for investors not to become transfixed on short-term stock price movements and instead remain focused on business fundamentals. https://bit.ly/4a80Pi3