FOR EDUCATION ONLY
Gregory Mannarino: “The Stock Market Is 60 to 70% OVERVALUED.”
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The stock market on Monday, December 23, 2019
Closed 60% 70%
DOW 28,552 17,845 16,785
S&P500 3,224 2,015 1,896
Nasdaq 8,946 5,591 5,262
Russell 2000 1,674 1,046 985
For example, the DOW would be fairly valued around 17,304 (28,552 : 1.65).
Financial analysts determine valuations using P/E ratios.
The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current share price relative to its per-share earnings (EPS). The price-to-earnings ratio is also sometimes known as the price multiple or the earnings multiple.
P/E ratios are used by investors and analysts to determine the relative value of a company’s shares. It can also be used to compare a company against its own historical record or to compare aggregate markets against one another or over time.
Earnings per share is a company’s profit divided by the number of common stock shares it has outstanding.