Valuing Wall Street

Protecting Wealth in Turbulent Times

By: Andrew Smithers

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Product code: 12475
ISBN: 0071354611
358 pages
Format: Hb
Published by: McGraw-Hill Professional, 2000, 1st edition

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Valuing Wall Street - front page cover image

Description of Valuing Wall Street

The U.S. stock market is massively overvalued. As a result, the Dow could easily plummet to 4,000 - or lower - losing more than 50% of its value wiping out nest eggs for millions of investors.

So argue Andrew Smithers and Stephen Wright in 'Valuing Wall Street - How to Predict and Plan for Market Bubbles'.

Using the q ratio developed by Nobel Laureate James Tobin of Yale University, Smithers & Wright present a convincing argument that shows the Dow plummeting from its peak of 9600 to lows not seen in a decade. Tobin's q, the controversial method for valuing stock markets which has successfully called every major market top this century, is the ratio of market value to replacement cost of assets and liabilities.

Using q, Smithers & Wright show the risks associated with Wall Street, how to predict a burst in the bubble before it's too late, and what to do when the market plunges.

Valuing Wall Street - Chapter headings

Part One: The Case for q
1. The Good News and the Bad News About q
2. On q
3. q and the Long-Term Investor
4. q Versus the Competition

Part Two. Stock Market Risk and Return
5. The Power of Compound Interest (or How to Oversell Stocks)
6. The True Impact of Stock Returns
7. Stock Market Risks: some History
8. Stock Market Risks: The Impact on Investors

Part Three: q And The Value of Wall Street

9. The Meaning of Stock Market Value
10. Stock Picking or Aggregate Value?
11. What Hindsight Tells Us About Stock Market Value
12. A Closer Look at q
13. What q Could Have Told Investors About Value in the Past
14. q as an Investor Tool

Part Four. q And The Future of Wall Street
15. The Bad News About Stocks as Investments for the Long Run
16. Why q Has Risen, and Why q Will Fall
17. The Good News About Stocks As Investments for the Long Run

Part Five: Surviving the Bear Market
18. What to Do with Your Money
19. What Not to Do with Your Money

Part Six: How to Value the Stock Market
20. How to Value the Stock Market: Four Key Tests for Any Indicator of Value
21. The Dividend Yield
22. The Price-Earnings Multiple
23. The Adjusted Price-Earnings Multiple
24. Yield Ratios and Yield Differences
25. Corporate Net Worth and q
26. q-Equivalence
27. q and the Dividend Discount Model

Part Seven: q And the ANTI-qs
28. The q Debate Among Economists
29. The Equity Risk Premium and Stock Market Valuations
30. The q Debate Among Stockbrokers

Part Eight: q And The U.S. Economy
31. Past Falls in q and Their Economic Impact
32. The Economic Consequences of Alan Greenspan