Andrew Smithers: Tobin’s Q Indicates Market Overvalued

By on November 5, 2009

Tobin’s Q Ratio is an indicator used to determine whether the market is overvaluing or undervaluing company assets compared with their replacement cost. According to economist Andrew Smithers, using a combination of the Q ratio and Robert Shiller’s cyclically adjusted estimate of the market’s PE, results in an estimate the market is 40% overvalued.


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