Skill Building Exercise: Review Historical Relative Valuation Levels

  1. Follow the instructions in the associated video to build the two charts I reference in the videos for this workshop.
  2. Using the data in the chart explain the market psychology for why the stock’s relative P/E ratio has fluctuated in the past.  You may need to do some research, which is critical to understand the market’s long-term psychology for this stock.  Conducting the related “Factor Analysis” exercise will help to identify data series that explain changes in a stock’s valuation.
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