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Deutsche Bank: 0% Upside To S&P 500 "Fair Value" From Here
While the S&P is now trading several points above the Goldman 2015 year end target of 2100 (and about 95 points away from the FDIC-backed hedge fund's 2016 year end target of 2200), it is not just Goldman which sees no upside from here. As the table below shows, when the S&P was at 2088 few days ago, Deutsche Bank forecast 1% upside left until the end of the year. Which means that all else equal, absent a miraculous surge in corporate earnings by the end of the year or some inexplicable reason to push S&P multiples even higher (the GAAP P/Es is now 20x), the S&P which is now trading at 2105 has precisely 0% upside left based on non-GAAP PE "fair value" of 17.6x.
From DB:
Our sector fair value estimates are based upon the same intrinsic valuation model which we use for the overall S&P 500. It shows the most upside at Health Care, Utilities, Telecom and Tech – four of the sectors we overweight. Tech upside would be 13% if 5.25% real cost of equity was used, or 19% at 5.00% real CoE. This implies fair value sensitivity per 25bps real CoE change is ~5%.
More importantly, those chasing every dip in energy may want to read this: "We raised the growth premium at Energy to 0% from -5% as we see a milder than 20% downside for the sector through 2015 year-end. A 0% growth premium implies 16% downside from here and 19.1 fair value PE at 2015 year-end."
And in table format:
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Yeah, rigggghhhhttttt. Whatever, BTFD.
That's it, we've reached Nirvana. Everyone shut down their trading platforms and let's all get smashed tonight. The party is at Yellen's with a drive by egging of helicopter Ben's place starting at 2 AM.
Party at Yellens? Thats sort of like the 69 position, drinks are free but the view is awful!
You get Yellen and I'lll take the drinks
Then, buy the NIKKEI - Cheap at 15 year highs Zzzzzzz
Then they'll just raise the S&P target Monday to something even higher. This never ends.
Did paper change its Iraq coverage to suit Apple Computer?
http://tinyurl.com/p6gtagg
Dips are outlawed....BTFAH!
What garbage.
HAHAHAHAHAHAHA! Wait a minute,sorry. HAHAHAHAHAHAHA! I have to collect myself here. HAHAHAHAHAHA! Hold on, just a second...
HAHAHAHAHA! I needed a good laugh. Sorry. This is better than any sitcom on teevee or any stand-up comedian.
HAHAHAHAHAHAHAHAHA!
BTMFATH, bitchez!
So then count on at least +50% for S&P from here.
Habba zigga heard das Deutsche's band? mit a zig, mit a zang, mit a zigzag zigzang boom!
apologies to the 'Producers'
Fair Value? WTF is that?
about spx 800.
Ah, Thanx!
Whenever I hear the word 'fair' I automatically add the words "to me" since that's what they mean.....
Based on extend and pretend everything is truly amazing. Where does GAAP and NON GAAP come into play in a NON MARK-TO-MARKET world?
'Miraculous inexplicable reason for more surge'....we haz it, 'FED'!
the s&p real value is fucking 100 and that is being generous.
the most fucking mainpulated index on the planet.
Meanwhile, back in reality.... the S&P is going up at a near 70 degree angle. all offers are being met with frantic bids.
The question is not will the market go higher from here; that is a given. The question is how much higher will it go this year. another 10, 15, 20%? more?
Maybe. But the S&P went up almost 25% in 2013, half that in 2014. 2015 has a long, long way to go.
Volume is abysmal, Fool. Maybe you were not around in 1999 right before the market tanked. There were Bulltard Fools everywhere saying the very same things you are now saying. Many of you retards are going to repeat the same mistake---thinking you are cute and have an upper hand now. Fact is, the value of all paper assets will revert to the mean. That is an economic law. So, enjoy your phony fiat 'wealth' while you can. Soon it will evaporate quicker than you can log-on to your Etrade account...
Was it serious for tech sector Cost of equity of 5%:)?????? So tech secotr is just only 3% riskier than US TSY yields??
Here is a fair value estimates for some Tech stocks: http://prudentvalueinvestor.blogspot.com
Probably irrelevant. Money supply growth has been accelerating at warp speed everywhere recently (US, euro area, Japan). Some of the annualized monthly and quarterly growth rates are in the mid double digits (e.g. narrow US money TMS-1 has increase at 62% annualized in December). So the market reaction has very likely nothing to do with valuations, which are at their most stretched in history by some measures - money supply growth (i.e., inflation/monetary debasement) is the driver.