Barry Ritholtz, from\u00a0The Big Picture,\u00a0points out today on Bloomberg that Enterprise Value \/ EBITDA has the best track record of forecasting forward markets. Looking market wide EV\/EBITDA shows that the market is about fairly valued so future gains should be about average, in the 8 to 10% area. This is in contrast to other ratio’s which show an overvalued market.<\/p>\n
In regards to CAPE, the metric misses a couple of key points. ROE for technology companies are completely different than old line business. They simply do not require the investment that traditional old-line businesses did. Second, the cost of being an investor today is a fraction of what it used to be.<\/p>\n","protected":false},"excerpt":{"rendered":"
Barry Ritholtz, from\u00a0The Big Picture,\u00a0points out today on Bloomberg that Enterprise Value \/ EBITDA has the best track record of forecasting forward markets. Looking market wide EV\/EBITDA shows that the market is about fairly valued so future gains should be … Continue reading