What is meant by the term valuation in stock markets?How to valuate a company?
This is not an easy question to answer. There are various methods that are employed. Discounted cash flow is the most popular currently. It does however suffer from one really big problem. That is attempting to determine what the cash flow is likely to be. That does not prevent all of the discounters from the attempt. The way it works is projecting the future cash flow of the company out for the foreseeable and even the non-foreseeable future and discounting it to the present and then comparing it to the current price. Morningstar loves doing that and they are not the only ones. S&P also partakes of that strategy.
A strategy that I like because it is fairly simple is to compare the current PE of the company to the historical (last 10 years) for a company with a consistent earnings record. For example WMT. Its PE ratio has varied between 13 and 56 during the last 10 years. It has been a consistent earnings performer and has also been a consistent dividend payer and dividend raiser. Its current PE ratio is about 14 very near its ten year low. Seems to me to be a BUY.
Gold and Silver, economic Collapse.
A Palestinian olive oil company marketed through the International Fair Trade ociation has seen its exports soar after consumers bought their product in solidarity with Palestinians after Israel’s war on Gaza.
More at http://therealnews.com/c.php?c=081001YT
http://www.moMoneyTV.com – After initiating a broad and widespread investigation, we have now obtained definitive proof that there has been illegal manipulation in our energy markets, and we’re in the process of evaluating dozens of other such heinous and egregious acts of reckless and widespread fraud and manipulation, such as giving Treasury Secretary Hank Paulson an $800 BILLION blank check in the form of an increased Federal Debt Ceiling to bail out Fannie Mae and Freddie Mac. Oops, oh my, did I say that out loud?! More rants and raves from the global elite on the wonderfully exciting kleptocracy under which we live.
Why stock markets went completely haywire after 1980 – can you guess what happened? Freedomain Radio – http://www.freedomainradio.com
InTheMoneyStocks.Com discusses their pivot period for next Monday, July 7th and Tuesday July 8th as they expect a possible bottom in the market in the near term. They look at the keys in this market such as the $dollar$, oil and financials. They note oils move over $145 and question how much of it is a pre holiday premium based off geopolitical concerns. This is truly an amazing period in the world markets. Enjoy and get on board the best stock/futures chat room on the web as pro and amatuer traders join forces to discuss, trade and analyze the markets.