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URL:  https://boards.fool.com/arezi-ratio-for-apr-15-34181604.aspx

Subject:  Arezi Ratio for Apr 15 Date:  4/15/2019  1:18 AM
Author:  elann Number:  273877 of 275142


* 3/25 4/1 4/8 4/15/19
S&P 500 Index 2800.71 2834.40 2892.74 2907.41
Trailing 12 month PE 20.98 21.28 21.77 21.93
Trail Earnings yield 4.77% 4.70% 4.59% 4.56%
Forward 12 month PE 17.46 17.85 18.40 18.69
Fwd Earnings Yield 5.73% 5.60% 5.43% 5.35%
90 day tbill yield 2.46 2.40 2.44 2.44
10 year tbond yield 2.44% 2.41% 2.50% 2.56%
Arezi Ratio 0.52 0.51 0.53 0.53
Fed Ratio 0.43 0.43 0.46 0.48



The Arezi Ratio is the 90 day tbill yield divided by the trailing
earnings yield of the S&P500. A low ratio means that stocks are undervalued.

The "Fed Ratio" is the 10 year treasury bond yield divided by the
forward estimated operating earnings yield of the S&P500. A low ratio
means that stocks are undervalued. Thus, a ratio of 0.71 for example
means, according to Yardeni, that stocks are cheaper than "fair value"
by 29%.

The 'S=120-50*Arezi Ratio' formula indicates an allocation of 93%
stocks, 7% cash this week.


Other timing indicators:
The S&P index is above its 200DMA. - Bullish
We are in the Nov-Apr part of the year. - Bullish
The trailing PE ratio of the S&P is above 17. - Bearish
The treasury yield curve is normal. - Bullish

A composite allocation may start with the Arezi formula and subtract 10%
for each bearish indicator. The current target allocation is 83%.

An alternative allocation, using S=120-30*Arezi Ratio and the first
two of the other timing indicators, produces a target of 104%.

Elan
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