Thursday, June 18, 2015


Tobin Q

Tobin Q (also known as the Q Ratio) shows an extreme level of overvaluation.  It is computed by dividing the total market capitalization by the replacement cost of all its companies.  Investopedia explains it more here.

In the first quarter, this ratio came in at 106.11%, just beneath the 109% it was last year. But as the chart below shows, only the Tech Bubble of 163% was higher than the current area.  

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