Short answer. It’s not.
I haven’t done this analysis in awhile but I ran the full risk model against the S&P 500. This is not the entry model which operates at the zeroth “energy” level but the full eval model i.e. not the price market participants would love to buy a stock but the value most market participants would actually estimate the price a stock should trade if you removed hype, liquidity, cult of personality, etc.
The average S&P 500 company (ex Mag7) is trading at 4.58x model value. The average S&P 500 including the Mag8 is trading at 4.73x model value.
I realize these numbers are meaningless to you at this point but those multiples are not at all anomalous compared to previous pre-COVID periods. You can think of that as EM 4.73 though not completely accurate.
If you are curious that outlier over 100 is PLTR 0.00%↑ which is trading close to a record. It probably is a record actually but I didn’t keep this analysis in the database to compare against.
I wrote code to put this in the database every quarter going forward to see how this evolves.
If you like our risk/event charts they are available in chat via subscription. This subscription fee covers the cost of running all this code. Amazon Web services and data plans are not cheap.
As always, if you think there are spelling errors update your dictionary to the latest version. Happy speculation!
— AJ
Event Horizon Tools
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