Comments on: Can relative price-to-asset values be used to determine which countries are likely to provide the best investment returns? http://greenbackd.com/2009/10/05/can-relative-price-to-asset-values-be-used-to-determine-which-countries-are-likely-to-provide-the-best-investment-returns/ Deep value, contrarian, and activist value investment strategies Sun, 27 May 2012 15:12:48 +0000 hourly 1 http://wordpress.com/ By: UKValueInvestor http://greenbackd.com/2009/10/05/can-relative-price-to-asset-values-be-used-to-determine-which-countries-are-likely-to-provide-the-best-investment-returns/#comment-3114 Mon, 15 Feb 2010 12:06:03 +0000 http://greenbackd.com/?p=2532#comment-3114 Thanks for the excellent site and thanks for the many links to research papers. Regarding market valuations, one you haven’t mentioned in this post is Smithers and his Wall Street Revalued.

He uses Tobin’s Q to value a market and compares past valuations with subsequent returns using a hindsight value (the average of the returns over the next 1 to 30 years). Tobin’s Q turns out to be a more accurate (at least in the US over the last century) predictor of future returns than Shiller’s PE10 (or PE30 for that matter, which is better than PE10, as tested in another paper whose title eludes me).

How this can be used to compare countries is perhaps a different matter. Assuming they have the same quality of data, if two countries both have P/B or Tobin’s Q of 1.2, which will do better in the future? It probably depends on historic average valuations.

]]> By: Thrifty Anite tests resolve : Interactive Investor Blog http://greenbackd.com/2009/10/05/can-relative-price-to-asset-values-be-used-to-determine-which-countries-are-likely-to-provide-the-best-investment-returns/#comment-2009 Tue, 06 Oct 2009 07:01:50 +0000 http://greenbackd.com/?p=2532#comment-2009 [...] Greenbackd uncovers two papers that indicate stockmarkets on low price-to-asset values perform better. [...]

]]> By: Emiliano http://greenbackd.com/2009/10/05/can-relative-price-to-asset-values-be-used-to-determine-which-countries-are-likely-to-provide-the-best-investment-returns/#comment-2006 Mon, 05 Oct 2009 15:44:23 +0000 http://greenbackd.com/?p=2532#comment-2006 nice post, i think Buffett comment on this in the article “how inflation swindles the equity investor”

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