El blog que hace la economía accesible a casi todos

Autor: Guzmán Soldevilla

Plant growth-New life
Russell 2000

Russell 2000 is overvalued even considering an economic growth rate of 3.68% vs 3.11% in the last decade

The economic growth rate is one of the most important factor in the indexes' valuations (see Russell 2000’s overvaluation could be more than 60%). In this publication we explain the fundamentals of our estimation of this issue and its implications on Russell 2000's dividends growth. These calculations has…
Russell_2000 Valuation II
Russell 2000

Russell 2000’s overvaluation could be more than 60%

Russell 2000 overvaluation is already a familiar topic for some investors. This index is one of the main American stock exchange indexes, composed of 2000 small caps that have the distinguishing feature of having trailing 12 months P/E ratio of 130.5x and 120.3x after cyclical adjustments. It seems to be a very good opportunity to be short, or at least to keep in mind in the case market tendency changes.  Our trading algorithm has given already a signal to take a short position in Russell 2000. We will now try to begin the analysis of the fundamentals of the Russell 2000 overvaluation in this article, and in the following ones.
Libro Con un pan debajo del brazo