For example, performance is the thermometer used to measure the profitability of bonds. But how do you know if a stock index is expensive? I’m looking at ratios like the PER that follow an index, such as the Shiller indicator that calculates a adjusted profit ratio for the SP500, but that data is only available on a monthly basis. I’m looking for some kind of indicator that is updated daily and that reflects how expensive the index is in historical comparison.
There are data providers and graphic platforms that publish the price/benefit and price/accounting value ratios on a daily basis. For example, the National Stock Exchange of India offers this type of data every day for all of its indices. Here's the link: https://www.nseindia.com Other stock exchanges also publish that information, or you can check it directly with your regular data provider.
Thanks for the data from the Indian stock market. It’s an interesting starting point, although I’m more focused on U.S. indexes like SP500, Nasdaq or Dow Jones. I’d like to find something that is directly linked to those references, with fresh data, not monthly late. I’ve looked at sites like Finviz or even at FRED, but none offers a daily PE adjusted for inflation or softened profits. I guess it’s a lot to ask for, but I’m surprised that with so much technology we still rely on monthly metrics to evaluate if the market is overrated.
Most people keep the value of the index and don’t wonder if what they’re buying is cheap or expensive. That’s the difference between investing in the long term and playing the lottery with shares. That’s why I’m interested in this kind of indicators. I don’t want to look at just Japanese candles, I want a more macro view of what point of the cycle we’re at.
No one has really created a screener with a PER ratio on indexes every day? I find it hard to believe it. And if it exists, I'm sure it's buried behind a very expensive premium subscription, like everything that's really worth it in this world.
I'm starting to build an Excel with daily historical data from the SP500 and calculating an estimated PER using the daily EPS reported by index companies. It's an artisanal job, yes, but at least it gives me a clear idea of how the valuation moves over time.
Some have told me that the PER daily does not work because the profits do not change every day. I understand, but the price does, and quite. That’s why a mobile average of the PER or a standard deviation from the historical average seems very useful to me to know if you’re buying expensive.
If there is someone who has a home formula or alternative to estimate whether an index is expensive or cheap on a daily basis, I would appreciate it if you shared it. Sometimes the value is in what is not published in Bloomberg or Reuters.
The most ironic thing is that for bonds you have a thousand tools in real time to know if the spread or curve is reversed, but for stocks we continue with monthly or weekly data. It seems that institutionals do not want retail to think in terms of valuation.
I am considering using the SP500-GDP ratio as a daily reference. Although GDP does not change on a daily basis, the index variation can give signs of overpurchase if it is fired above certain levels. Has anyone else used the buffet ratio in real time?
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