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Testing The Predictive Power Of Equity Valuation Metrics: A Minskyian Approach, Mohd Ahnaf Habib Khan
Testing The Predictive Power Of Equity Valuation Metrics: A Minskyian Approach, Mohd Ahnaf Habib Khan
Senior Projects Spring 2016
Valuation process is at the core of finance. There are several methods that can be used to value a stock. Analysts, due to constraints in time, choose between a few metrics to obtain a target price for the stock. In this paper we analyze the predictive power of different valuation metrics when used to predict the S\&P 500. We do so by first presenting theoretical discussions about the financial markets. The case that EMH is not a good model for finance and that behavioral finance, though useful, does not create a complete picture. Mainstream investment theories presented by Neoclassicals and …