In finance, there are often well-known rules of thumb for investing that can easily become embedded in consensus thinking. For market timing, the well-worn “Buffett ratio” compares the value of stocks relative to the nation’s economic output. Other market timing formulas compare the relative value of government bond rates to the dividend yield provided by stocks. But are these generic sound bites telling the whole story in value investing?
There Is No Simple Rule Of Thumb For Stock Market Valuations
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.