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Session 33 (of 42): Market Timing - Valuing the Market
Description
In this session, we look at extending valuation approaches developed for valuing individual stocks to valuing the entire market. We begin by using an intrinsic valuation model to value the S&P 500 as the present value of expected cash flows on the index. While the approach is promising, it is dependent upon historical data and can provide poor signals, if there has been a systematic shift in risk preferences or growth potential. We also look at valuing a market on a relative basis, by either comparing its pricing over time or by comparing pricing across markets.
Playlist for class (Intro + 42 sessions): https://youtube.com/playlist?list=PLUkh9m2BorqnZGADa8cTzeJblmrZY_SqP&si=zI2pk17pJeld4nWR
Slides: https://www.stern.nyu.edu/~adamodar/pdfiles/invphilslides25/session33.pdf
Post-class test: https://www.stern.nyu.edu/~adamodar/pdfiles/invphilcertificate/postclass/session33test.pdf
Post-class solution: https://www.stern.nyu.edu/~adamodar/pdfiles/invphilcertificate/postclass/session33soln.pdf
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