Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (11) | Ignore Thread Prev | Next
Author: BenGrahamFollowe One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 212397  
Subject: Re: OT: Graham & Doddsville Fall Issue Date: 10/8/2012 7:46 PM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 5
>>>Interesting that Joel Greenblatt thinks that the market has only been more undervalued than today 13 percent of the time (page 9). I'd be interested to see his methodology...<<<

He explained very clearly how he arrived at it. He used the Russell 1000 Index (which is the largest 1,000 U.S. stocks by market cap). He used the market cap weighted free cash flow yield for each day of the last 20 years. In only 13% of the days has it yielded a higher free cash flow than now.

He went on further to say when it has been this cheap it has given a 17% return over the next 12 months and a mid 30's over 2 years. He also said "It’s a very attractive time to invest in the market, despite the run-ups that we’ve seen in the last year."
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (11) | Ignore Thread Prev | Next

Announcements

Post of the Day:
Value Hounds

Kate Spade's Wild Ride
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement