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by Doug Short The Q Ratio is a popular method of estimating the fair value of the stock market developed by Nobel Laureate James Tobin. It’s a fairly simple concept, but laborious to calculate. The Q Ratio is the total price of the market divided by the replacement cost of all its companies. Fortunately, the government does the work of accumulating the data for the calculation. The numbers are supplied in the [...] Doug Short is the vice president of research at Advisor Perspectives. Note from dshort: I have low confidence is the Q ratio this month. The Flow of Funds data on which it’s based is increasingly stale. The latest release in June includes data through Q1 2011. The new Flow of Funds release will be available on September 16th. I’ll update this commentary that afternoon. The Q Ratio is a popular method of [...] The Q Ratio is a popular method of estimating the fair value of the stock market developed by Nobel Laureate James Tobin. It’s a fairly simple concept, but laborious to calculate. The Q Ratio is the total price of the market divided by the replacement cost of all its companies. Fortunately, the government does the work of accumulating the data for the calculation. The numbers [...] |
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