As stock prices fall today, with the Dow Jones Industrial Average (INDEXDJX:.DJI) ending a scorching 326 points lower ahead of earnings, are core valuations moving past a realistic point? Has quantitative easing lifted stocks, and now that the spigot is beginning to tighten, are investors beginning to consider more traditional measures of valuation, such as earnings? Earnings growth in focus In his February 3 Equity Strategy note, Citigroup researcher Tobias Levkovich opines that 2014 could be a year in which the market is all about earnings growth. “With valuation only moderately attractive, it seems that the heavy lifting for equity appreciation…
Are Equity Valuations Out Of Line With Reality?
Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.