10-Year P/E: Stocks at Fair Value

After years of being overvalued by one of the tougher value metrics — the 10-year P/E ratio made famous by Yale economist Robert Shiller — stocks finally appeared undervalued a few few months back. Now, with stocks having surged some 35% in the past three-plus months, the broader market is back up to “fair value” levels according to the Shiller P/E, The Business Insider’s Henry Blodget reports. “The market’s [10-year] PE right now is about… Read More

Yes, Green Shoots — and More, Sonders Says

Like Barry Ritholtz, Charles Schwab Chief Investment Strategist Liz Ann Sonders isn’t buying talk that the recession will end in late 2009 — but that’s because she thinks it has already ended. Sonders — who correctly called the start of the recession well before most — tells Yahoo! TechTicker that the recession “ended maybe April or May”. She cites a number of economic indicators, saying that the current environment looks very much like the end… Read More

Ritholtz: What Green Shoots?

Barry Ritholtz of Fusion IQ and The Big Picture blog thinks the talk of a housing recovery and a general economic recovery are very premature, and that what we’re experiencing now is relief that we avoided financial Armageddon — not real forward movement. “When I hear the word soar,” Ritholtz tells Yahoo! TechTicker in discussing reports of May’s supposedly “soaring” housing starts, “I think of eagles flying in the sky, not, ‘We were at ankle… Read More

Bear Market Winners: A Good Long-Term Bet?

Given the major trauma the events of 2008 and early 2009 had on investors, it might seem hard to blame someone for latching onto the advice of the relatively few strategists who have fared well — or at least not that badly — during the bear market. But according to newsletter-tracker Mark Hulbert, doing so could be a very bad idea. In a recent special report for the American Association of Individual Investors, Hulbert writes… Read More

Buckingham: Time for Value

Recently, we highlighted a study performed by Russell Investments that found value stocks typically begin to overtake growth stocks “almost immediately” when the economy bottoms. Today, John Buckingham of Al Frank Asset Management provides some additional evidence that good times may be in store for value investors, who were hit particularly hard in the recent downturn. In an interview with InvestmentNews.com, Buckingham says that in the previous five instances (before the current one) in which… Read More

Bull Runs: How they Happen

Money magazine recently offered some interesting data on the relationship between the economy and the stock market. In the chart below, you can see how the market, on average, has risen during the first year of bull markets since 1980. What’s key to note is that as the market starts its rise — and, in fact, as it gets well into its rise — the economy typically is far from sparkling. “History shows that bull… Read More

The Wisdom of Lynch & Templeton

Here’s an oldie but a very, very goodie — a Louis Rukeyser interview with Peter Lynch and the late John Templeton. The exact date of the video (posted on YouTube by ValueInvestingPro) isn’t given, but the references to the troubles in Kuwait and Lynch’s retirement make it clear the interview took place in the latter part of 1990 or the beginning of 1991. Lynch and Templeton cover a variety of topics — from the efficient… Read More

Forester Says We’ve Seen the Bottom

Tom Forester, whose Forester Value was the only stock mutual fund to end 2008 in the black, says he believes the market has bottomed, but that stocks are now in a trading range. “I do think it has bottomed,” Forester tells the Nightly Business Report. “But I also think we’re in a trading range. We could go up 20 or down 20 from here. … I think if you’re a longer-term holder, in the three-… Read More

The Little-Known Shipping Metric

Time magazine recently had a piece on “the least known key economic indicator” — the Baltic Dry Index. The BDI, which is a measure of worldwide shipping rates, has “registered some eye-popping gains over the past month,” Time’s Jeff Israely writes. “The London-based index registered its 23rd straight daily gain on Wednesday, closing at 4,291, its highest mark since September and the longest streak of gains since July 2006.” Daily rates for large “Capesize” ships… Read More

Buffett, Berkshire on Bond Binge

Back in October, Warren Buffett told the world that he was buying American equities in his personal (non-Berkshire Hathaway) account, which previously had been filled with only U.S. government bonds. But for Berkshire, on the other hand, it seems Buffett’s been focused elsewhere: municipal bonds. According to Bloomberg News, Berkshire has doubled its stake in municipal bonds over a recent nine-month period, upping the amount of local government debt it owned to just over  $4… Read More