Interesting little exercise from Andrew Wilkinson at Miller Tabak & Co. Having seemingly generated a lot of client interest with some earlier research looking at valuations of key US indices, he’s now extended the methodology to bourses around the world.
For each index Wilkinson has compared a blended forward 12 month PE ratio with two standard deviations of the five-year average PE. Here’s his resulting table: Read more
What goes up, must come down, but most particularly the shiny yellow stuff lately. And Bitcoins. Can’t forget Bitcoins.
Anything else feeling a bit weighty lately?
The FT30 share index is having a facelift. From Tuesday the oldest surviving UK stock market index, launched in 1935 to “test the feel and changing moods of the equity market”, will be available through an interactive graphic on FT.com. The revamp of this index of 30 actively traded UK companies across a range of sectors is an opportunity to consider where its value now lies. An index that is biased towards the UK economy has something to prove when globalisation is a given of corporate life, as the FT explains in a guide to the index’s history, strengths and shortcomings.
Themis Trading — ever-alert for structural weaknesses in markets — have a new paper.
It’s about ‘phantom indices’ — or the idea that widely-followed indices such as the S&P 500, the Dow Jones Industrial Average or the Nasdaq 100 don’t actually track all of the shares traded intraday. The discrepancy, Themis says, stems from the indices being calculated using only primary market data, in a world where a significant amount of trading has now moved off into non-primary spheres. Read more