Great Macro-Finance take! Practical and insightful! Keep them coming! Thank you!
I look at these metrics also from an equities guy angle. Playing with various complementary nuances:
- besides CAPE, checking for S&P 500 FCF Yield, Price/Sales
- besides recession periods charted, see how it looks with equities drawdowns of 20% or more
- going back with the economy and stock market only until 1985 or 1995 to capture more of the new techie economy, the 'new regime' or the 'regime change' like econs would say ;)
- adjust for the bigger stock buybacks, and the rising share of overseas revenues for the S&P 500 companies (40% nowadays, while before smaller)
Many ways to look at it, and definitely 2-4 charts can be very informative and useful in terms of telling us the easy to forget kind reminder: 'Price is what you Pay, Value is what you Get', and a gauge where we are in the business cycle.
Have a great weekend Spyros!
P.S. in my next reports I will cover these nuances and other complementary approaches and time series: the more of them align, the stronger the signal.
Great Macro-Finance take! Practical and insightful! Keep them coming! Thank you!
I look at these metrics also from an equities guy angle. Playing with various complementary nuances:
- besides CAPE, checking for S&P 500 FCF Yield, Price/Sales
- besides recession periods charted, see how it looks with equities drawdowns of 20% or more
- going back with the economy and stock market only until 1985 or 1995 to capture more of the new techie economy, the 'new regime' or the 'regime change' like econs would say ;)
- adjust for the bigger stock buybacks, and the rising share of overseas revenues for the S&P 500 companies (40% nowadays, while before smaller)
Many ways to look at it, and definitely 2-4 charts can be very informative and useful in terms of telling us the easy to forget kind reminder: 'Price is what you Pay, Value is what you Get', and a gauge where we are in the business cycle.
Have a great weekend Spyros!
P.S. in my next reports I will cover these nuances and other complementary approaches and time series: the more of them align, the stronger the signal.
Great stuff, thank you!
Glad to hear, welcome, I thank you!
Enjoy the weekend!
P.S. forgot to add yesterday, my complementary S&P 500 Leading indicator is also in Warning territory like your take (not a red flashing signal for now, but not far either): https://substack.com/@maverickequityresearch/note/c-290699845
Wow, thanks for sharing. Tricky situation. 😅
Welcome, tricky indeed :)