Crew Capital Management Thoughts on Investment

Welcome to the Crew Capital Management Thoughts on Investment blog. At Crew Capital, investment education is key to how we work with our clients. We hope our conversation and analysis entice you to think further on your investment strategies and planning. For further discussion, please contact us at rjung@crewcapital.com

Thank you!
Robert F. Jung, CFA CPA*

*CPA inactve

Thursday, May 29, 2008

Valuations of Global Stock Markets

From the most recent Argus Research Market Watch:
The U.S. dollar has fallen in recent years, thus helping returns of foreign markets – which continue to beat those of U.S. markets. Bulls on foreign stocks note that they remain cheaper than U.S. stocks based on lower price multiples of estimated earnings; they also have higher dividend yields. But analyzing data supplied by Bloomberg, we noticed that the valuation and yield gaps between the major, developed market indices are not really that great. Most broad stock market indices trade at 13- to 16-times estimated 12-month earnings, with dividend yields of 2%-3%. Emerging markets are a different story in some cases. The market indices for India and China sport forward P/Es of 20- to 30-times, although this is down from 30- to 40-times about a year ago. What is most noticeable is the dramatic decline in the forward P/E of the Nikkei 225 stock index. Last year at this time, that index traded for nearly 30-times forecasted earnings versus 17-times today.


Source: Argus Research Company, Market Watch, May 29, 2008
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