Since the big blowout on April 10, the market has drifted. There has been no sign of recovery. If anything, prices have had a downside bias.
Corporate results have come in through this period. Most have been within the range of expectations, albeit generally on the lower side.
At some stage, bargain-hunters will come in. This will happen only when a fair number of people think prices are cheap in comparison to future earnings power. This opinion is a qualitative assessment far more than just mechanical application of financial models.
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By any valuation, this market is reasonably cheap. Whether you look at price-earnings, or price-book values, or price-cash earnings, or price-earnings-growth ratios, the answers are similar.
The market is close to historical lows on all these indicators and even on the basis of nominal prices. That impression is strengthened when one adds interest rate trends to any reasonable model. Falling rates should also equal a rise in equity valuations.
Even die-hard contrarians would concur that it