They then look at how those various Price-to-Book ratios relate to forward 1-year returns....In short, it looks good.
An anonymous blogger from the 'financial industry' writing about the economy, markets, politics, corrupt organizations, or whatever else seems worth discussing.
Showing posts with label price-to-book. Show all posts
Showing posts with label price-to-book. Show all posts
Friday, August 9, 2013
Emerging Markets Price-to-Book Ratio & Forward Returns
Here is an interesting look from J.P Morgan regarding the Price-to-Book ratio on Emerging Markets.
Although I don't like that the 1-year forward returns only use 1999 to today. Why not use the same data as the first graph back to 1993? Also, I don't tend to think any valuation metric is a reliable short-term (1 year) timing indicator. However, Rob Arnott has also been pointing out that longer-term forward returns (10 years) are also looking pretty tempting using a Shiller PE ratio. All I know is, anything looks good 'relative' to the US right now.
Labels:
emerging markets,
JP Morgan,
price-to-book,
valuations
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