Data Update 2 for 2024: A Comeback Year for Stocks!
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- เผยแพร่เมื่อ 16 ม.ค. 2024
- As we start on 2024, it is worth noting how much the mood has shifted in the last year. At the start of 2023, dark clouds were gathering. Inflation was out of control and a recession seemed imminent, but the S&P 500 surprised us all by delivering a 26% return. That recovery was uneven, with seven stocks accounting for a big portion of the gain, and disparate returns across sectors. The 2024 outlook is much sunnier, with the consensus shifting to a soft landing and inflation largely under control, and those higher expectations may be the biggest challenge for equities this year. The expected return (8.48%) and the equity risk premium (4.60%) for the S&P 500 do not set off red flags, by themselves, but an intrinsic value of the index (see link) leads me to conclude that stocks are over valued by about 9%, to start the year. Your outlook on earnings and interest rates may be different from mine, leading you to a different valuation and conclusion.
Slides: pages.stern.nyu.edu/~adamodar...
Blog Post: aswathdamodaran.blogspot.com/...
Valuation of the S&P 500 on January 1, 2024: pages.stern.nyu.edu/~adamodar...
Historical Returns on stocks - 1928 -2023: pages.stern.nyu.edu/~adamodar...
Historical expected returns and implied premiums for S&P 500: pages.stern.nyu.edu/~adamodar...
The most awaited video of the year
Thank you, Prof. Damodaran! I get immense value out of watching your equity valuation update videos 🙂👍 Cheers!
Professor, on your S&P 500 valuation at 15:20, I think adding the current risk-free rate (10 yr T Bond) and the historical ERP of 5% is internally inconsistent.
If we use the current risk-free rate of 3.88% + current ERP of 4.6%, we get an index value of 4518. If we use historical number since 2008, the 10 yr T Bond average to 2.84% + 5% ERP would give an index value of 4766. Both shows that the index is actually fairly valued, especially comparing to historical numbers.
Dear Professor,
You is a great expert financer.
Thx for material.
Something happened today in Indian equities market that has never happened before. Would love to know thoughts on the HDFC Bank’s free fall today (India’s largest private bank).
Thanks Professor! So much wisdom in this video.
Thank you, professor.
Thank you sir for quality information!
Hats off to you sir and to your efforts to give us knowledge. I read your valuation books and it's help me a lot. And the lectures you provided are holy water for me and my friends also. We learn lots from you sir. Once again thank you so much 😊😊😊
Thanks for your thoughtful analysis. I wish you could explain to me, though, what you think of the Shiller PE as a valuation metric and why it is so much more pessimistic than your analysis.
Why is the cash payout % inaccurate for both estimates under the “last 12 months” column? I computed it on my own and the percentage is off both times.
Aswath, I love your content, but the slides are hard to read! Could you change them to shorter bullet points for future episodes, and remove data which only confuses? I find myself trying to read the content on the screen, then I realise I haven’t listened to what you said, so I have to rewind. Thanks!
It would be great if we can also start valuing the BSE 500 or the NIFTY 500 ?
Very usefull, you are becoming a star professor ! :)
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Bernardo, meu chefe no trabalho, se você ler esse comentário, não estou vendo as investidas agora. Faz parte. Assistindo ao craque.
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Thankyou! It was very useful. PLEASE make a video on Indian Markets as many low earning Indians are investing in Equities in hoards which will help them a lot and they really need lest they burn their fingers badly with their life earnings. Thanks
In India does anyone this kind of work?
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