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Peter Brock
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Vancouver-based, I am a veteran of the investment industry. I inhabit Graham & Doddsville, but I am not a strict fundamentalist. My abiding interest in investor misbehaviour and market history has led me to the dark side. I now draw trendlines and track market internals. I'm an active online... More
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Brock Value, Lost Decades, The Investor's Bodyguard
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My book:
The Investor's Bodyguard Companion Guide
  • The Intrinsic Value Of The S&P 500 (April 27, 2012) 2 comments
    May 1, 2012 12:15 AM | about stocks: SPY

    With US GDP at $15.46 trillion and Moody's Aaa bonds yielding 3.95%, the intrinsic value of the S&P 500 index as measured by BV is 2098.11.

    By comparison, the S&P closed at 1403.36 on April 27, 33% below fair value.

    (click to enlarge)

    Understanding Brock Value charts

    The red and green lines found on many of the BV charts on this site are 0.33 standard deviations over and under BV. These lines fence in the normal range of the market. When the market is above the red line, ten-year returns tend to be lower than average. When the market is below the green line, ten-year returns tend to be higher than average.

    (click to enlarge)
    The red and green lines are one-third of a standard deviation from BV, the white line.

    For more about Brock Value, please visit my site.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Themes: Valuation, fair value, intrinsic value Stocks: SPY
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This post has 2 comments:

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  •  
    Maybe one way to look at valuations but way way out of whack with other LT valuation metrics.
    2 May 2012, 02:09 AM Reply Like
  •  
    I compare BV to other valuation metrics all the way back to 1919, if you want to see for yourself which ones struggle to model reality, and which one fits.

    The comparison is here: http://bit.ly/KiKuHN
    8 May 2012, 12:14 PM Reply Like
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  • After 12 years and six months, the Dow has produced a measly 0.78% annual return, dividends included. $SPY http://lostdecades.com
    Jul 8, 2012
  • Moody's Aaa weekly rate hits new cycle low, lowest since the 1950s. Intrinsic value of the S&P now 2275. http://brockvalue.com
    Jun 26, 2012
  • Market mired in gloom, 41% below fair value. Upside beckons. $SPY $DIA http://brockvalue.com
    Jun 20, 2012
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fair value, intrinsic value, lost decade, lost decades, market valuation, market-outlook, real total return, shiller cape, valuation, Valuation
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