Europe: Portfolio Strategy - Strategy Matters - 10x 2010; attractive valuation supports higher prices

Many investors believe the 38% rise in the markets since the low is incompatible with the prospects of weak economic growth. We believe that valuation already reflects these fears. On our top down estimates, DJ Stoxx 600 trades at 10.4x 2010 earnings. The market appears to be implying a 2.6% 5-year annualised earnings decline on normalized ERP.

>> Europe: Portfolio Strategy - Strategy Matters - 10x 2010; attractive valuation supports higher prices  July 30, 2009 [PDF, 247 KB]