The Ultimate Valuation Matrix For Global Stocks

Tyler Durden's picture

Wondering where to place your hard-earned cash next year? Feel like playing the global game of equity market Russian Roulette? The following matrix covering every sector in all developed country stock markets provides just the color you need. Based on price-to-book, US and German stocks are, in aggregate, the most expensive; and EM and South Korea are cheapest currently relative to historical P/B. Oil & Gas seem the cheapest sector overall (on the P/B basis) while Retail, Real Estate, Media, and Tobacco sectors appear richest.

 

Key:

Dark blue (very cheap) = current relative valuation < -1.5 standard deviations from historical average
Light blue (cheap) = current relative valuation between < -1.5 and <-0.75 standard deviations from historical average
No colour (neutral or N/A) = current relative valuation between > -0.75 and <+0.75 standard deviations from historical average
Peach (expensive) = current relative valuation between > +0.75 and <+1.5 standard deviations from historical average
Red (very expensive) = current relative valuation > +1.5 standard deviations from historical average

 

Source: UBS

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Racer's picture

Yeah that's fine as long as the books are not cooked! Otherwise... touch ye not with ye greatest barge poll that ye canst findest

Thomas's picture

I am 15-20% oil and gas, and it sure feels under valued!

Midas's picture

Where is Smith and Wesson?

 

Joe moneybags's picture

I tried to play minesweeper on the chart, and got blown up.

chump666's picture

And Marketwatch are still calling for the re-inflation trade or "bull market forever" even through Nov corrected hard and we have had a HFT trade since then.  Price action???  The S&P is stuck between 1400 and 1450 after the Nov meltup from 1350+.  And to amiss the Nasdaq danger signs is madness.

Europe is overbought, Asia, now including China is extremely overbought. 

Squid Vicious's picture

and on CNBS Pissonme was blabbering about the "Goldilocks" market - must have had Krudlow whispering in his ear during one of their men's room hook-ups

ball-and-chain's picture

I see the DOW climbing to 37,000.

No kidding.

What's to stop it from happening?

The powers that be will continue printing.

The market is like a pig in shit.

Peace.

http://www.angrysinner.blogspot.kr/2012/12/yesterday-dragon-lady-served-beef-and.html

August's picture

New Zealand - looking good!