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MiB: Aswath Damodaran: Valuations, Narratives & Academia

The Big Picture

A nine-time “Professor of the Year” winner at NYU, Damodaran teaches classes in corporate finance and valuation to MBA students. He has also written several books on corporate finance and equity valuation and has published widely in journals. Damdoran loves “untangling the puzzles of corporate finance and valuation.”

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The Problem Of High U.S. Equity Valuations And How Advisors Can Factor In Current Evaluations Risks

Nerd's Eye View

The Shilller Cyclically Adjusted Price-to-Earnings (CAPE 10) Ratio is one example that takes into account current market valuations versus company earnings, generally predicting that the higher the valuation at the beginning of a period the lower the expected return for that period.

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Market Valuation, Inflation and Treasury Yields

Advisor Perspectives

Our monthly market valuation updates have long had the same conclusion: US stock indexes are significantly overvalued, which suggests cautious expectations for investment returns. On August 4, 2020, the 10-year Treasury yield hit its all-time low of 0.52%. As of February 29, it was 4.25%.

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P/E10 and Market Valuation: February 2024

Advisor Perspectives

Here is the latest update of a popular market valuation method, Price-to-Earnings (P/E) ratio, using the most recent Standard & Poor's "as reported" earnings and earnings estimates, and the index monthly average of daily closes for the past month. The latest trailing twelve months (TTM) P/E ratio is 25.9

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Valuation Metrics And Volatility Suggest Investor Caution

Advisor Perspectives

Valuation metrics have little to do with what the market will do over the next few days or months. However, they are essential to future outcomes and shouldn’t be dismissed during the surge in bullish sentiment.

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P/E10 and Market Valuation: January 2024

Advisor Perspectives

Here is the latest update of a popular market valuation method, Price-to-Earnings (P/E) ratio, using the most recent Standard & Poor's "as reported" earnings and earnings estimates, and the index monthly average of daily closes for the past month. The latest trailing twelve months (TTM) P/E ratio is 25.2

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Market Valuation: Is the Market Still Overvalued?

Advisor Perspectives

Here is a summary of the four market valuation indicators we update on a monthly basis.