Calculations for the Stock to understand Stock markets better!

Questions: When to buy bonds over stocks, potential Stock market correction

Answers: Intelligent Investor

Earnings yield: 3 year avg Earnings over Price of Stock. (A)

Dividend yield: <similar>

Bonds Yield: yield from S&P AAA bonds

Earnings Yield / Bonds Yield : Ratio of A to the yield on Bonds

Dividend Yield / Bonds Yield : 

Earnings to Book Value:

 

>> image: https://photos.google.com/photo/AF1QipMoCcdv3M-s9dwS2TG7kT6oHEzq5fnjUNSXvWMV/edit

src: Intelligent Investor

-  ratio dropped for Earnings Yield / Bonds Yield and correction happened in next 2 years (30 years period, dropped from close to 4% to less than 0.72%, roughly 1/10th level.)

- Earnings to Book Value has remained between 11-12%. for 30+ years

 

https://photos.google.com/photo/AF1QipNrv8qnurJ6CdfxmJkJhIcrDIIhfvIujoxd8209

DCF calculation for Google

Fair Value Price with 20% discount : 1043.62

calculations here