Tuesday, June 30, 2009

Market Valuations: A Look at Inflation and Volatility

The Technical Take has an interesting article (which is really a commentary on an article posted by William Hester with the Hussman Funds) on the characteristics of the current market as compared to prior bear markets.

Excerpt from William Hester:
"...secular bear markets of last century shared three characteristics. They each lasted for more than 15 years, they each ended at extremely attractive levels of valuation (generally about 7-9 times trailing 10-year earnings), and , and they each endured many years of growing volatility in output and inflation, which eventually created the mindset for investors to price stocks at attractive levels of valuation. The current secular bear market can claim none of these characteristics yet."

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