ACTV - Guesstimating The Level Of Froth In U.S. Stocks

2024-05-15 13:10:00 ET

Summary

• Calling tops and bottoms in the stock market is the Holy Grail for investing analytics.
• The value of monitoring valuation/bubble risk and trend is that when the two are in agreement, the related risk analysis is arguably more persuasive.
• The longer-run analytics suggest the margin for error is fading, but trend analytics suggest this isn’t yet an acute headwind.

Calling tops and bottoms in the stock market is the Holy Grail for investing analytics. Alas, success on this front is nearly impossible, at least in terms of timely precision. Yet, some of us still venture down this path. Why? Developing perspective helps, even if it’s less-than-perfect perspective, and it’s used judiciously, and the caveats are recognized....

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