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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: anializer who wrote (32990)	12/9/2008 11:22:37 PM
From: E_K_S	Respond to of 78751

Not good for the long term if James Tobin's Q Ratio tests previous lows.... Tobin’s Q Ratio Indicates ‘Horrific’ Market Bottom, CLSA Says bloomberg.com From the article:"...The ratio, a method of valuing U.S. companies developed by Nobel Prize laureate economist James Tobin, indicates that the Standard & Poor’s 500 Index, set for its worst year since 1931, may sink by another 55 percent to 400 when the market bottoms around 2014, London-based Napier said. The ratio divides total market capitalization by the cost of replacing assets...." ========================================================== The key is if there is a huge long term deflation spiral that makes it cheaper to buy replacement assets than the market now values them. EKS