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Invesco tells me the P/E for SPGP is 15.21, and the ROE is 42.08 for a PEP ratio of .361. Given SPGP's thesis, the final number isn't too surprising.There’s an investment case for both groups — buying cheap stocks has been a winning strategy historically, and so has buying shares of highly profitable companies. Still, differences in valuation and profitability make stock funds difficult to compare. One way to solve that is with a variation of Lynch’s PEG ratio that substitutes profitability for growth. This PEP ratio, let’s call it, compares funds’ P/E ratio with their profitability, and like the PEG ratio, the lower the PEP ratio, the better.
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Thanks for sharing!
I find it interesting to play with as I evaluate the holdings in our over-stuffed IRA's, what to add to on a dip, or looking at funds in the same category.
1) It can't predict the next 3-6-12 months
2) It can't predict market correction and which index/category will go down more.
3) Once upon a time PE10(CAPE) looked like a decent indicator until it failed miserably.
Prof Shiller created PE10 which is supposed to predict performance based on valuation better than PE
On 05/2012 (https://money.cnn.com/2012/04/10/pf/investing-Shiller.moneymag/index.htm)
Question: You have become famous for your cyclically adjusted 10-year price/earnings ratio. What do the latest numbers say about future stock market returns?
Shiller: we found a correlation between that ratio and the next 10 years' return.
If you plug in today's P/E of about 22, it would be predicting something like an annualized 4% return after inflation.
FD: In reality, the SP500 made 13.6% in the next 10 years (04/31/2012-04/31/2022). Let's deduct the inflation and make it 11%. It is much better than countries with lower PE10 such as Emerging markets.
4) If valuation or another indicator has been how you make more money, we would have a lot more investors such as Buffett and Lynch. Times have changed too...article quote:"It’s harder to find overlooked stocks than it was in Lynch’s day because more people are looking for them — anyone with a smartphone has free access to extensive markets and financial information. The result of greater competition is evident in the numbers: Fast-growing or highly profitable companies are almost always the most expensive while the cheapest ones come with lackluster growth or thin profits."
Dinky linky.
BTW, it's about time to look at the context and stop looking for controversy.
Valuation Italic
Valuation Bold
Valuation Bold & Italic
Back to the subject. I have read annually for years that EM stocks have a better value than US stocks...and it didn't seem to matter.
In fact, at the end of 2022 many analysts and managers told us that Tech is overvalued and to buy Value stocks....and QQQ made YTD already over 42% and Value is way behind.
Years ago on this board several claimed that Apple is another blue chip, it wasn't.
Bottom line, valuation can be "irrational" for years.
All CAPS are screaming. That would be bad as would be all bold.
But selected CAPITALIZATIONS often substitute for bold at many discussion forums.
Many sites don't have bold (Facebook, Twitter, etc). Some that have it don't support it on copy-and-paste (including MFO, ProBoards, etc). This is an issue for those who compose long posts on WORD and then paste it - much of the formatting is lost, bold, italics, color (none anyway at MFO, M*), tabs, spacing, etc. It is too cumbersome to reformat everything after copy-and-paste.
BTW, MFO isn't user-friendly for tabular materials; often, the URLs have to be reposted/redone; as noted above, colors aren't supported; attachments cannot be included.
Anyway, selected CAPITALIZATION for bold is a typical practice that I also follow.
To preserve spacing, for tabular materials or other text, you can tell the browser that the material is preformatted so that it doesn't try to reformat (generally compress all whitespace to a single blank). Put <PRE> before the text and </PRE> after it.
For example, here's CNBC's table of MFJ tax brackets for 2023: This isn't perfect (see first line) because preserving tabs is sometimes not enough to completely reproduce the spacing. Adding a second tab in the first line fixes that. URLs are problematic when they include embedded whitespace. For example, http://www.example.com/my beautiful page
doesn't work because it looks like the URL ends with "my". This is fixed by using the link icon and inserting the URL in the dialog box. No redoing of the URL (i.e. replacing the blanks with '%20's) is needed.
http://www.example.com/my beautiful page
Color is certainly supported by MFO, but it has to be handled manually.
@Old_Joe provided an excellent example of how to do colors and tables with HTML tags for colors (as I did, above) and explicit blanks ( ) for precise spacing. Here's his post: https://mutualfundobserver.com/discuss/discussion/comment/167577/#Comment_167577
To see how he worked this magic, see here:
https://mutualfundobserver.com/discuss/post/quote/61469/Comment_167577
Based on his encoding of blue as 0x0000FF rather than "blue" (which is what I used), I would guess that he used a tool to process the table he was transcribing.
MFO certainly isn't user-friendly when it comes to these sorts of formatting, but posting with things like color are not impossible.
If you think tarting up the typeface makes your posts more, something, knock yourself out.
Where you may see “aesthetic seriousness,” readers might see "pomposity" or overwrought "grandeur" a little too much for an informal place like a forum. They might see something else entirely, like shouting to grab attention. Reader's opinions will be colored by their familiarity with the writer's previous posts.
You say, without typographical histrionics: What do you think you have proved?
Do you buy things without bothering to estimate, and consider, the value of them? That value does not predict the future? Nothing does. Not charts. Not momentum. Not even the Magic 8-Ball or Ouija Board.
What do I do? I can write a lot about it and did in the past, but not anymore. Believe it or not, it works pretty well. It's mostly at (https://fd1000.freeforums.net/thread/25/putting-all)
I use my site for many of my investments ideas, from generic subjects and all the way to specifics. Have a nice day.
Nor does he denigrate factors that aren't meant to predict the market in an effort to convince people that his schemes can time the market. Consequently, YBB does not have to post disclaimers if people lose money practicing his scheme: Lost money following your scheme? More practice.
Maybe you aren't a duck. But you sure do quack with the flock.