On May 1, the Wednesday before the 2019 GuruFocus Value Conference and Berkshire Hathaway Inc.’s (BRK.A, Financial)(BRK.B, Financial) annual shareholder meeting, Warren Buffett (Trades, Portfolio)’s favorite market indicator reached 144.4%, approximately 5% higher than its April 1 reading of 139.2% and 4% lower than its all-time high of 148.5% set in March 2000.
Broad market indexes fall from intraday highs
Although the Dow Jones Industrial Average and Standard & Poor’s 500 index traded at intraday highs close to their all-time highs, the Dow tumbled 162.77 points from Tuesday’s close of 26,592.91 while the S&P 500 closed 19.84 points lower than the previous close of 2,945.83.
According to CNBC columnist Fred Imbert, Federal Reserve Chairman Jerome Powell said in a news conference on Wednesday that the recently low inflationary pressures might just be “transitory” and that a rate cut is not necessary at this time. The two-year Treasury rate increased from 2.20% to 2.27% on the heels of Powell’s comments.
Despite the broad market selloff, top Berkshire holding Apple Inc. (AAPL, Financial) increased 4.91% to $210.52 on strong June-quarter earnings guidance, sending the Cupertino, California-based tech giant’s market cap close to $1 trillion.
Stock market remains overvalued
As of Wednesday, the Wilshire 5000 full-cap index stands at $30.415.6 trillion, approximately 1.44 times greater than the recently reported gross domestic product. Based on the current market level, the U.S. market is expected to return -2.2% per year over the next eight years.
According to the predicted and actual returns chart, the expected market return ranges between -9.9% and 2.10%.
Even though the market remains significantly overvalued, several GuruFocus model portfolios have outperformed the benchmark in at least eight of the past 10 years. Such portfolios include the most broadly held portfolio, the Buffett-Munger portfolio and the undervalued predictable portfolio.
Premium members have access to a wide range of value screens, including the Ben Graham Net-Net screen and the All-in-One Screener, which allows users to create their own value screens. Table 1 lists the value screener record as of May 1.
| Screener | USA | Canada | UK | Europe | Asia | Oceania | Latin America | Africa | India |
| Graham Net-Net | 227 | 56 | 53 | 278 | 634 | 10 | 9 | 13 | 47 |
| Undervalued Predictable | 50 | 6 | 56 | 135 | 68 | 8 | 46 | 6 | 12 |
| Buffett-Munger | 36 | 4 | 32 | 89 | 91 | 2 | 26 | 3 | 48 |
| Peter Lynch PE | 30 | 0 | 16 | 45 | 56 | 0 | 6 | 2 | 10 |
| Peter Lynch PS | 93 | 8 | 33 | 116 | 60 | 6 | 28 | 23 | 38 |
| Peter Lynch PB | 127 | 24 | 53 | 167 | 86 | 6 | 29 | 23 | 60 |
| Lynch p2ebitda | 188 | 7 | 48 | 230 | 91 | 7 | 17 | 18 | 51 |
| Hist Low PS | 26 | 2 | 14 | 47 | 81 | 0 | 17 | 5 | 25 |
| Hist Low PB | 46 | 3 | 23 | 65 | 84 | 2 | 28 | 9 | 21 |
| Magic Formula | 4528 | 549 | 2292 | 7888 | 13308 | 575 | 1100 | 385 | 3464 |
| 52-week Low | 873 | 104 | 351 | 1186 | 2318 | 84 | 367 | 137 | 1127 |
| 52-week High | 1956 | 252 | 1229 | 3154 | 1855 | 197 | 536 | 106 | 477 |
| 3-year Low | 407 | 61 | 163 | 534 | 1183 | 34 | 146 | 57 | 660 |
| 3-year High | 1484 | 157 | 941 | 2197 | 906 | 140 | 440 | 66 | 270 |
| 5-year Low | 285 | 36 | 119 | 347 | 792 | 21 | 86 | 47 | 416 |
| 5-year High | 1321 | 146 | 907 | 2018 | 709 | 131 | 412 | 53 | 250 |
| High Div Yield | 56 | 5 | 9 | 116 | 39 | 14 | 22 | 8 | 6 |
Table 1
Disclosure: No positions.
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