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US Equity Valuations: Difference between revisions
→Analyst Opinions
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* Jason Trennert, Strategas Research Partners chairman and CEO (Jul 27 2023): Even looking at the most optimistic estimates for earnings next year equity market doesn't look cheap. But markets can remain overbought longer than they stay oversold.Most value now is from sectors that have not participated in the rally so far. <ref>https://www.youtube.com/watch?v=HKjl9a4ZjJI</ref> | * Jason Trennert, Strategas Research Partners chairman and CEO (Jul 27 2023): Even looking at the most optimistic estimates for earnings next year equity market doesn't look cheap. But markets can remain overbought longer than they stay oversold.Most value now is from sectors that have not participated in the rally so far. <ref>https://www.youtube.com/watch?v=HKjl9a4ZjJI</ref> | ||
* Aswath Damodaran, professor of finance at NYU Stern School of Business (Aug 11 2023): Markets are overreach currently, but don't think will get to the 2022 lows. However, he admits markets tend to overshoot or undershoot in both directions. ERP has value in 5-10 years, but not way to know when the move will happen. <ref>https://www.youtube.com/watch?v=VPkQ7_3Sf1E</ref> | * Aswath Damodaran, professor of finance at NYU Stern School of Business (Aug 11 2023): Markets are overreach currently, but don't think will get to the 2022 lows. However, he admits markets tend to overshoot or undershoot in both directions. ERP has value in 5-10 years, but not way to know when the move will happen. <ref>https://www.youtube.com/watch?v=VPkQ7_3Sf1E</ref> | ||
* Jeffrey Gundlach (Sep 19 2023, 28:30): Difficult to have love for stocks when the ERP is at 17 year lows by a lot. The price action this year is mostly PE expansion, earnings haven't done much, and estimates for 2024 are high, markets not pricing for a recession, and he thinks the economy will not be as robust in 2024. He only likes long-term treasuries as short-term trade in anticipation of a recession, he thinks investment grade and High yield bonds are not cheap due to spreads being low still, and he likes mostly credit in the structured market due to better spreads.<ref>https://www.youtube.com/watch?v=nm-H8zzGKu4</ref> | |||
* Bill Gross, Pimco co-founder (Oct 4 2023): Equity investors would need to justify entering the market without a risk premium by relying on potential increases in productivity and a stronger economy, he is not in this camp, and thinks PE ratios are coming down to increase the equity risk premium. He thinks inflation will settle higher than 2%, and 5% on 10 year treasury is still not great value due to the fiscal issues. <ref>https://www.youtube.com/watch?v=xAhvxjmqIfc&t=23s</ref> | * Bill Gross, Pimco co-founder (Oct 4 2023): Equity investors would need to justify entering the market without a risk premium by relying on potential increases in productivity and a stronger economy, he is not in this camp, and thinks PE ratios are coming down to increase the equity risk premium. He thinks inflation will settle higher than 2%, and 5% on 10 year treasury is still not great value due to the fiscal issues. <ref>https://www.youtube.com/watch?v=xAhvxjmqIfc&t=23s</ref> | ||
* Jeremy Grantham (October 5 2023): With are currently in the deflating part of the bubble from 2021, we will enter a deeply recession in the near term, an we are entering a new era of higher yields. Yields at current levels, it would be mathematically reasonable to think the US market as whole could fall by 50%, he contends. There’s trouble ahead if the “magnificent seven,” the few companies that have been carrying the index this year, lose any part of their magic.<ref>https://www.bloomberg.com/news/articles/2023-10-06/podcast-gmo-s-jeremy-grantham-says-no-one-should-invest-in-the-us</ref><ref>https://www.youtube.com/watch?v=-GlQk_FfD3Q</ref> | * Jeremy Grantham (October 5 2023): With are currently in the deflating part of the bubble from 2021, we will enter a deeply recession in the near term, an we are entering a new era of higher yields. Yields at current levels, it would be mathematically reasonable to think the US market as whole could fall by 50%, he contends. There’s trouble ahead if the “magnificent seven,” the few companies that have been carrying the index this year, lose any part of their magic.<ref>https://www.bloomberg.com/news/articles/2023-10-06/podcast-gmo-s-jeremy-grantham-says-no-one-should-invest-in-the-us</ref><ref>https://www.youtube.com/watch?v=-GlQk_FfD3Q</ref> | ||