Salient to Investors:

Mark Hulbert writes:

  • The stock market may be overvalued and could begin a bear market but it does not resemble the bubble market in 2000.
  • The explosion of bubble warnings is unwarranted. The 5 identifiers found by JeffreyWurgler at NYU and Malcolm Baker at Harvard in stock market bubbles since the 1920s are all absent today:
    • IPOs in the last 90 days numbered 69 versus 123 in Q1, 2000. The number in Q1, 2015 was a 2-year low.
    • The average first-day IPO return in the last 90 days was 17.6% versus 96% in Q1, 2000.
    • Dividend-paying companies have a 37% higher price/book ratio than non-dividend paying companies: in the 2000 bubble, non-dividend paying companies had a 43% higher price/book ratio than dividend-paying companies.
    • The proportion of corporate cash coming from equity issuance is less than half as much as in Q1, 2000.
    • Share turnover is at 62% versus 89% in Q1, 2000.


Read the full article at

Click here to receive free and immediate email alerts of the latest forecasts.