It's so nice for me to have found this blog of yours, it's so interesting. I sure hope and wish that you take courage enough to pay me a visit in my PALAVROSSAVRVS REX!, and plus get some surprise. My blog is also so cool! Don't think for a minute that my invitation is spam and I'm a spammer. I'm only searching for a public that may like or love what I write.
Feel free off course to comment as you wish and remember: don't take it wrong, don't think that this visitation I make is a matter of more audiences for my own blogg. No. It's a matter of making universal, realy universal, all this question of bloggs, all the essential causes that bring us all together by visiting and loving one another.
You must not feel obliged to come and visit me. An invitation is not an intimation. Also know that if you click on one of my ads I'm promised to earn a couple of cents for that: I would feel happy and rewarded (because I realy need it!!!) if you did click it, but once again you're totaly free to do what ever you want. I, for instance, choose immediatly to click on one of your ads, in case you have them. To do so or not, that's the whole beauty of it all, however, blogocitizens must unite also by clicking-help eachother when we know cybermegacorporations profit from our own selfishness regarding to that simple click.
I think it's to UNITE MANKIND that we became bloggers! Don't see language as an obstacle but as a challenge (though you can use the translater BabelFish at the bottom of my page!) and think for a minute if I and the rest of the world are not expecting something like a broad cumplicity. Remenber that pictures talk also. Open your heart and come along!!!!!
***Lets talk a little about the value measurement of earnings yield.While this measurement is being more widely followed, it remains a very key tool in obtaining the true value of a security.
***The earnings yield is nothing more that the opposite or reciprocal of the P/E ratio.It helps to put value in a more easily understandable light as it can be measured againstthe prevailing 10 year note yield.The premise is that if the earnings yield on the market or whatever stock you wish to measure is greater than the 10 year note yield then the security is undervalued.
***Now this is a gross simplification of the theory, but it gives you a reference point.Don't forget also that the 10 year T- note yield is a before tax measurement and the earnings yield is an after tax measurement. Therefore even if the earnings yield is less that the 10 year note yield, there is still a possibility of a security being undervalued.
***This gives you a very strong starting point as to where to go from here with the tool. Especially the after tax aspect of the earnings yield.Here is an example of the calculation for the earnings yield on a stock.Let us suppose a stock has a P/E ratio of 12. In order to get the earnings yield we just invert the 12/1 fraction to 1/12 and the yield comes to 8.33%. Compare this to the 4.5% 10 year note yield and you have quite the undervalued security. Maybe even more so than the 8.33% dictates as this is the after tax yield. To convert it to the before tax yield simply multiply the 8.33% by 1.33 for the 33% corporate tax bracket. The before tax yield becomes 11.08% which makes this security very undervalued.
***You can also use the earnings yield of an entire index such as the S&P 500 to get a feel for the current state of value in the market. Above this post you will see a visual of the current earnings yield model that shows the S&P 500 to be quite undervalued. This does not take into account the after tax effect which would move the target for the S&P 500 even higher.
***The earnings yield is a great tool and should be in every good investors toolbox.
Currently an electrician by trade I have been involved in both the equity and futures markets for over 20 years. I have learned alot over the journey with the highlight being you never stop learning.
I am always looking for new and innovative ways of analyzling the markets.
I really want to get the investment message out to the young adults and encourage them to save, especially while they have little to no liabilities.
You Can Have the Greatest Trading System in the World, But, If You Lack The Proper Mindset to Trade the Markets You Eventually Will Be Doomed To Failure.
1 comment:
It's so nice for me to have found this blog of yours, it's so interesting. I sure hope and wish that you take courage enough to pay me a visit in my PALAVROSSAVRVS REX!, and plus get some surprise. My blog is also so cool! Don't think for a minute that my invitation is spam and I'm a spammer. I'm only searching for a public that may like or love what I write.
Feel free off course to comment as you wish and remember: don't take it wrong, don't think that this visitation I make is a matter of more audiences for my own blogg. No. It's a matter of making universal, realy universal, all this question of bloggs, all the essential causes that bring us all together by visiting and loving one another.
You must not feel obliged to come and visit me. An invitation is not an intimation. Also know that if you click on one of my ads I'm promised to earn a couple of cents for that: I would feel happy and rewarded (because I realy need it!!!) if you did click it, but once again you're totaly free to do what ever you want. I, for instance, choose immediatly to click on one of your ads, in case you have them. To do so or not, that's the whole beauty of it all, however, blogocitizens must unite also by clicking-help eachother when we know cybermegacorporations profit from our own selfishness regarding to that simple click.
I think it's to UNITE MANKIND that we became bloggers! Don't see language as an obstacle but as a challenge (though you can use the translater BabelFish at the bottom of my page!) and think for a minute if I and the rest of the world are not expecting something like a broad cumplicity. Remenber that pictures talk also. Open your heart and come along!!!!!
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