Netflix – A Brutal Lesson On the Dangers of Overvaluation

The stock market has been pummeling Netflix (NFLX), assumingly based on significantly lowered expectations of future earnings results. However, the purpose of this article is not to provide a comprehensive analysis of Netflix the business.  Many fine articles have recently been published that have covered the business potential of Netflix more than adequately. Whether Netflix[…]

Dissecting the Dow: 21 of the 30 Dow Stocks are Undervalued, 6 are Fairly Valued, and Only 3 Appear Overvalued

Introduction In this final segment, we will cover the 10 poorest performing DJIA stocks since 1995.  In part one which covered the best 10 performing DJIA stocks; we saw a group of companies that could best be described as consistent above-average earnings generators.  Consequently, it makes sense that they were the best performers since we[…]

9 of the Second 10 Best Performing Dow Stocks are Fairly Valued

The Dow Jones Industrial Average Second 10 Best Performers There is a lot of discussion taking place today about whether or not stocks are good long-term investments.  Most of it is slanted towards the negative with dire forecasts of poor future returns. Implied in these forecasts of doom are opinions that stocks are overvalued today.[…]

Most of the 10 Best Performing Dow Jones Industrial Stocks are Great Buys Today

Introduction When people refer to what the stock market is doing, they are more often than not speaking about the Dow Jones Industrial average.  This leading index of 30 high profile stocks serves as a proxy for the overall health of both the economy and the stock market.  We have long held that thinking in[…]

Prof. Schiller and CAPE, Maybe Correct Generally, But Specifically Wrong: The Market is Currently Cheap

Introduction Many well-known stock market pundits to include the likes of Henry Blodgett point to Professor Robert Shiller’s cyclically adjusted PE ratio or CAPE to make a case that the stock market (S&P 500) is overvalued.  According to Prof. Shiller, the long-term average PE ratio (CAPE adjusted) for the S&P 500 is approximately 16.  And[…]