Tuesday , 5 July 2022

Investing

S&P 500’s PEG Ratio Suggests Overvaluation & Coming Correction (+6K Views)

The S&P 500 index is trading at record high levels and optimism remains high with Barron's professional money manager survey indicating a record 74% money managers being bullish on markets even at current levels. [When one] measures valuations with respect to expected growth, [however, the ensuing ratio, the PEG ratio,] suggests overvaluation at these levels. [Let me explain further.] Words: 254; Charts: 1

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“Unlikely” Doesn’t Mean “Never”: “Rare” Events Happen Surprisingly Frequently in the Markets (+4K Views)

By definition, rare events should seldom occur and applying that understanding to financial markets assumes that all market events follow a normal distribution or, in layman's terms, a bell-shaped curve. More specifically, the statistics say that 99.7% of all daily movements should fall within three standard deviations of the mean, no more. Well, guess what? New research suggests that they clearly don't follow such a pattern - that "unlikely" doesn't mean "never". [Let me expand on that.] Words: 1079; Charts: 1

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