DaveinHackensack

@VIC: A Radically Different Context for Value Was Going On Outside

"So, at what point do we find "value"?"

One idea that comes to mind from reading Vitaliy Katsenelson's thesis about secular range-bound/bear markets: instead of considering a stock a value because it trades at a discount to market-average P/E multiples, look at what the market average P/E multiples were at the end of previous range-bound/bear markets. For example, after the range bound market ended in about 1950, the one year trailing P/E ratio on the S&P was 7x. So, theoretically, if you could find a stock trading at 7x today, and you thought that company's earnings were sustainable (a key point), that might be a value.