Industrial Insight

Oil prices stable and low,below $60 a barrel

June 16, 2015
Leave a Comment


Posted in Uncategorized

Steel production recovering from low.

June 16, 2015
Leave a Comment


Posted in Uncategorized

Continued decline in Chinese steel production troubling

June 10, 2015
Leave a Comment


Posted in Uncategorized

Scrap prices see modest rise

June 10, 2015
Leave a Comment


Posted in Uncategorized

Copper prices decline

June 10, 2015
Leave a Comment


Posted in Uncategorized

Oil prices also stabilizing after making a low

June 10, 2015
Leave a Comment


Posted in Uncategorized

Steel production stabilizing at lower level

June 10, 2015
Leave a Comment


Posted in Uncategorized

Suggests market value of public company trends to 0.68% of replacement.

June 3, 2015
Leave a Comment

http://www.advisorperspectives.com/dshort/updates/Q-Ratio-and-Market-Valuation.php?referrer=feed43.com

Interpreting the Ratio

The data since 1945 is a simple calculation using data from the Federal Reserve Z.1 Statistical Release, section B.102, Balance Sheet and Reconciliation Tables for Nonfinancial Corporate Business. Specifically it is the ratio of Line 39 (Market Value) divided by Line 36 (Replacement Cost). It might seem logical that fair value would be a 1:1 ratio. But that has not historically been the case. The explanation, according to Smithers & Co. (more about them later) is that "the replacement cost of company assets is overstated. This is because the long-term real return on corporate equity, according to the published data, is only 4.8%, while the long-term real return to investors is around 6.0%. Over the long-term and in equilibrium, the two must be the same."

The average (arithmetic mean) Q Ratio is about 0.68.


Posted in Uncategorized

Scrap prices low and stable

June 2, 2015
Leave a Comment


Posted in Uncategorized

Copper prices decline from lower level.

June 2, 2015
Leave a Comment


Posted in Uncategorized
« Previous PageNext Page »

About author

I'm the executive vice president for a steel casting trade association, the Steel Founders' Society of America. I've got a crazy wife, five crazy children, three crazy people that married into the family, and two crazy fun little grandsons.

Search

Navigation

Categories:

Links:

Archives:

Feeds