More Goodies Added to Our Portfolio Table
We’re now including relative P/E metrics and a table for the Bullpen.
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In an effort to further improve our Portfolio Table of valuation and other metrics, we are adding a few new things into the mix, as we look to see if a turn in the MACD indicators for the S&P 500 and the Nasdaq Composite emerge today or in the coming days.
In her missive last night Helene Meisler pointed out that so far extreme volume to the downside has yet to emerge. That would be a sign of market capitulation and possible final flush that would suggest we are near the end of this current market rout. We recognize the temptation to act at times like these, but as we think about the chart we shared in Friday’s Weekly Roundup from Bespoke, it reminds us to be wary of short-term head fakes between the first day, after a more than 4% drop, and where the market is one week later.
But lest you think that means idle time, as mentioned above, we are bringing several new things into our Portfolio Table, and yes, once we clear this current market rout, we will re-introduce formal pickup points and most likely adjust some checkpoint levels.
To make the Portfolio Table a bit easier to read, we’ve broken it into two sections, which also brought additional space. We’ve used that space to introduce relative P/Es for each of the holdings measured against the P/E of the S&P 500.
There are a few reasons why we as investors look at these figures. They allow us to assess the premium or discount relative to the market against prospects for EPS growth, dividend yield and other metrics. These figures, when measured against where historical relative P/E ratios have been give us another way to help determine if a stock is overextended or undervalued. As we see it, it brings another helpful vantage point that will allow us to triangulate valuation and risk. Rest assured, we’ll be talking more about this in the days ahead.
We’re also expanding the Portfolio Table to include the stocks in the Bullpen. And we’ll remind you, just because a stock is in the Bullpen does not guarantee it will graduate to the Portfolio. However, this is a bit of a peek behind the curtain as to some of the things we may be contemplating.
