Monday, April 29, 2013

Repost from ValueWalk

S&P 500 Valuation Based on Inflation Data

Since 1978 the SP500 Intrinsic Value Index calculated using the “Prevailing Rate” (Real GDP Rate + 12mo Trimmed Mean PCE Rate) as a capitalization rate for the mean earnings for the SP500 has been a helpful indicator in judging SP500 under/over valuation levels.