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Name Date of valuationS&P 500 Index levelEarnings in 2021Earnings in 2022Cash flow as % of Earnings in 2021Riskfree Rate nowRiskfree rate in 5 yearsIntrinsic Value of Index% Under or Over Value (Computed)My Story Crowd Judgment: Value of Index
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Aswath DamodaranJan 1, 20213,756.07169.18197.2075.00%1.00%2.00%3,360.1411.78%Improving earnings + Rising interest ratesAverage3,311.68
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Mark MarcusFeb 23, 2021$3,881.00169.18185.1375.00%1.37%3.0%2,955.9031.30%Earnings recover, inflation runs rampant and Fed hikes rates higher than expected to combatMedian3,301.41
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Matthew GageFeb 23, 2021$3,881.00169.18185.1375.00%1.00%5.00%2,740.9141.60%Overall, agree with all of professors assumptions except I expect higher inflation to come due to monetary policy etc. that will force the interest rates to rise over the next five years.High4,077.34
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Weiting HongFeb 23, 2021$3,881.37175.00200.0090.00%1.37%2.00%3,457.3412.26%Earnings estimates took place in December 2020, when the political outlook, and thus the road to recovery from COVID, was even more cloudy. While there are likely additional roadblocks that will hinder the progress of today's plans, the reality is likely more optimistic than the estimates back thenLow2,740.91
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Rodrigo SperbFeb 23 20213,881.37170.00197.2075%1.37%4.50%2,951.9631.48%I assume a 4.5% 10 year yield in 5 years to reflect an inflationary and low real growth scenario. I used a 4.8% ERP based on the most the implied ERP calculation. Growth rates reflect market expectations.
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Serena ZhangFeb 23, 20213,881.37170.00195.0075%1%3%3,122.3124.31%I used a different approach of estimation of the earnings expected to be generated in 2021 and 2022. I also expect to risk free rate in 5 years to be around 3 %.
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Lawrence ZhangFeb 23, 20213,881.37169.18197.2075%1.36%2.20%3,304.1717.47%In terms of the risk free rate in 5 years, I feel the US is entering the valley of the business cycle so the risk rate will not recover from the pandemic a lot.
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Raaja RaikundaliaFeb 24, 20213,881.01171.00201.0075.00%1.00%2.00%3,360.1415.50%Monetary policy impact coupled with growing IR.
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Gianmarco FrattiFeb 24,20213,881.37180.00195.0080%1.37%3.50%3,298.6417.67%I believe that inflation, along with a new economic recovery will push up the risk free rate to 3.5 % in 5 years. We should expect earnings to grow and the cash flow returned to investoprs to slowly come back to pre-covid levels
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Yilong ZhangFeb 24, 20213,881.37170.00200.0075.00%1.37%2.50%3,287.7918.05%I believe that, after the upcoming economic stimulus policies and more strict regulations for Covid-19, the risk-free rate of the US will recover to around 2.5%. Also, earnings in 2021 and 2022 will be both promoted on small scale.
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Xintao HuangFeb 24,20213,881.37169.00197.0075%1.35%3%3,141.6523.55%Fed has promised to keep the rates low and inflation at an acceptably higher level in the coming years. (rising interest rate) Though the stimulus package is in place, I suspect that as well as the president's tax reform will have significant effect on the economy.
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Tianchang WangFeb 24, 20213,881.37169.18197.2075%1.37%2.50%3,242.8619.69%I believe the rate will gradually come back to pre-covid level in 5 years in order to combat inflation.
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Nicholas RibeiroFeb 24, 20213,881.37200.00210.0090%1.42%3%3,424.7513.33%I believe that we are going to be surprised by earning growth this year. COVID has made us wary of asset bubbles, so I feel analysts and economists have been conservative in estimating fwd growth. However, the FED wants to continue maintaining cash-reserves (or savings) high through the recovery from COVID, so I see that return to shareholders might still lag. Nevertheless, I am bullish on the dollar and the US economy. (FOR NOW...)
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Kushal MehtaFeb 24, 20213,881.37169.18211.4880%1.37%2%3,599.347.84%Earnings and cash flows distributed to shareholders will be better than consensus expectations, due to comeback from companies in cyclical industries. A slightly higher cash payout ratio and higher earnings lead to a slight overvaluation of the index at 8%
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Annie KongFebruary 24,20213,881.37169.18197.2075%1.42%3%3,138.8723.66%Earnings will improve , however, it will take some time for the market recover
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Madhur G. Chaturvedi02/24/20213,861.96173.24201.2175%1.37%2.24%3,363.1714.83%I expect cash flows to returm strongly but interest rates to rise slightly sharper than anticipated. The market is overpriced even though cash flows will be higher than anticipated.
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Di Hu02/24/213,881.37169.18197.2075%1.37%1.00%3,546.009.46%The Index would seem to be less overvalued in a long low-interest environment.
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Moibhi TyndallFeb 24, 20213,897.22169.18204.0077%1.35%1.55%3,452.0012.90%As the post Covid-recovery boom continues to drive th market upwards, a certain amount of overvaluation is to be expected. Additionally, the likely rising interest rates and increased croporate tax rates will dampen growth moving forward. The outlook for future growth on the S&P500 will largely be determined by the mass vaccination in the United States and how companies will react to further reopening in the future.
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Brian Reckdenwald2/24/213,900.00138.12185.0070%1.40%2.50%3,025.9628.88%I anticipate interest rates rising to match increased inflation. I also expect the increased debt associated with the COVID relief packages to necessitate changes to the corporate tax rate and capital gains taxation. These changes will put a damper on company earnings, making the index quite overvalued.
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Stephanie Li2/24/213,905.20169.18197.2075%1.37%3.00%3,140.8624.34%I assume that Interest rate will increase to 3% in 5 years. Current expansionary monetary policy pushed interest rate very low and considering current Fed's expectation of inflation which could exceed 2%, it is reasonable to make assumption of 3% as risk free rate after 5 years. Current earnings is not that pessimisve and given the economy recovery later, earings will enjoy a higher growh. At the same time, cash flow rate will be fairly lower due to the previous economy downside.
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Julie Richardson2/24/213,904.00169.18197.2075%1.371.83,014.4729.51%I did not have time to evaluate the 75% Cash Flow % of Earnings input but analysis: I have a strong opinion that our economy is fragmented - those that have a lot of disposable income to invest in market do and benefit, then those who cant. The latter was most heavily affected by COVID crisis. Don't think stimulus can save this COVID effect longterm - only exaserbating the divide. We have seen this demographic split bubbling up politically since 2008. I think it's just a matter of time (maybe closer to 10 years rather than 5) before the market reflects it as well.
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Josh Gilly2/24/213,904.00169.18197.2075.00%1.3723,344.3916.73%Not too many differences from Prof Damodaran. Earnings across the board will recover after COVID but not as significantly as many think due to the fact that the S&P 500 is mostly filled with big tech and other big firms that are continuing to perform well during the pandemic.
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Raghu Kulkarni2/23/213,881.00169.18197.2075%1.3723,471.6311.79%Expect strong earnings growth in 2021 which will taper back to historical avg, interest rates will gradually rise because of inflation affecting both cost of equity and pepetual growth, market overvalued by 12% partly because of 2020 momentum and very optimistic COVID recovery
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Pieter Loots2/24/213,914.86169.18197.2075%1.373%3,140.8624.64%Inflation influences risk free rate long term.
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Rebecca Choi2/24/213,912.48162.97180.0075%1.371.50%3,150.9424.17%I'm a bit more conservative in my approach. I don't expect earnings in 2021 to exceed what they were in 2019 (pre-COVID) because we're still in a pandemic world and the reality is that by the end of 2021 we still wont be back to a pre-COVID world. However, I expect some recovery in 2022 but am not optimistic about a huge increase in earnings becuase there will be long term effects from the pandemic. I expect the risk free rate to maintain relatively low to try and off-set the long term effects of the pandemic.
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Rushabh Lakhani2/24/213,926.19169.18197.2075%1.372.25%3,293.6819.20%Over the past five years, the risk free rate has ranged from ~0.5% to slightly over 3.2%. I expect it to stay within this range five years from now and rise from the current levels after the effects of the pandemic subside. I also expect earnings to grow slightly from 2020 to 2021 (with the world still feeling the effects of the pandemic). However, by 2022 and onwards, I expect earnings to return to pre-COVID levels.
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Courtney Ferguson2/24/20213,925.43169.18197.2075%1.382.00%2,973.4232.02%While we have been in a recession, the market has continued to climb. It is possibly ripe for a correction at some point soon given the expected K-shaped recovery. Upon re-opening, investors may pull their money out of the market to store more in cash and/or distribute their money elsewhere such as on entertainment or gambling. Full recovery from COVID won't be expected until at least 2023 when travel is expected to come back in greater waves.
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Danny Abboudi2/25/20213,925.25177.64207.0675%1.48%2.00%3,718.805.55%Analyst expectations are underestimating the bounceback the economy will see once vaccines are wdiely distributed, companies get a better handle on work-from-home, and many States open in full (for better or worse). Interest rates will remain low, but rise gradually to 2%, as inflation does not increase rapidly due to stimulus and a still depressed labor market. Companies will also be hesitant to return too much cash back to shareholders initially, as they judge whether future strains of the virus may shut down the economy again. The market is still slightly overvalued.
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Jesse Jia2/25/20213,829.34175.00185.0085%1.52%3.50%2,896.3432.21%Low earnings growth environment. Rates set to rise as a result of inflation, increasing required return on stocks and decreasing present value of cash flows.
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Arianna Sanchez2/263,839.08167.25195.1480%1.42%2%3,274.4017.25%Earnings will begin to improve, but businesses confidence will waver, causing cash flow as % of earnings to remain below historical average.
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2/26/20213,811.50169.18197.2075%1.44%2%3,341.4214.07%I fully expect continued GDP growth and an accelerated recovery starting in 2022 once herd immunity is reached. This will have an outsized impact on earnings forecasts, although companies will be cautious about extending dividends to shareholders. The big uncertainty is interest rates. While its expected that interest rates will rise as GDP growth picks up, the Fed has been trying to push inflation over 2% for the past ten years with no luck. Interest rates have been historically low for this period and it's difficult to see them rise above 2%. In any case, the market is clearly overvalued but the % over-valuation can range from 14% to 25% assuming if the risk free rate stays within the narrow range of 2% to 3.5%.
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AJ Chesir2/27/20213,839.08169.18197.2075%1.37%2%3,140.8622.23%One thing that has come out of this pandemic has been the spike in retail investing, whether for the better or worse depends who you ask. However, I believe that the analysts are underestimating the bounceback of the market in the coming years. Just like society has grown resiliant and stronger because of COVID, businesses have done the same. I expect businesses to come back stronger than ever and have new creatvity, drive, motivation, and resilancy in order to come back better and more profitable than ever before; that will play out heavily in the markets
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Anqi Xu2/27/20213,811.15172.18198.2075%1.44%2%3,359.8713.43%Under the trillion-dollar relief plan which involves stimulus checks, unemployment insurance, and child tax credit, and with the likelihood of a higher hourly minimum wage, the market sentiment will likely become more optimistic and the risk free rate will also rise gradually due to inflation.
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Greg Burns2/27/20213,811.15160.00175.0070%1.42%2,973.7128.16%Can we continue to run on stimulus? Inflation could make my analysis null and void.
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Brandon Proetto2/27/20213,811.00169.18197.2080%1.50%2.50%3,258.0016.97%Earnings will grow in 21' and 22' per guidance as COVID restrictions are relaxed. However, 10-year treasuries are already approaching 1.5% and it is unlikely to have such bullish earnings growth without inflation. With continued monetary/fiscal stimulus and strong recovery, I expect 5-year risk free to increase to 2.5%
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Shourya Agawal2/27/20213,811.15169.18197.2075%1.40%3%3,159.8520.61%I expect the economy to recover strongly from the pandemic, and cash flows to see a boost. However, this recovery would be accompanied by a period of inflation, causing the risk free rate to rise simultaneously.
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Joao Victor Neves02/28/20213,811.15167.49195.2377%1.40%2%3,458.5810.19%Gradual improvement on earnings and increase of risk free rate
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Marissa Liu02/28/20213,811.15138.12197.2075%1.44%2.50%3,239.9917.63%Though society may not return to pre-COVID times in the next year or two, I believe the economy will recover strongly by the end of the 5th year. Since risk-free rate is driven by inflation and economic growth, long-term rates will increase, but not to historic levels.
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Hakan Altunay02/28/20213,811.15158.84169.7575%1.44%2.00%3,777.070.90%I do not expect the market to have such a strong improvement in expected earnings in 2021. Vaccination rates are still low and vaccine supply issues are impacting this rate. Many businesses are still impacted by Covid and I can't imagine such a strong recovery in 2021. I do agree with the Professor that the Rf after year 5 will be around 2%. With that, my valuation of S&P shows the market is only slightly overvalued after last week's sell off and Rf increases
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Andrew Taylor02/28/20213,811.15180.00210.0075%1.41%2.50%3,451.4910.42%Recovery in 2021 is fast as the vaccine rollout continues with 2022 as a huge growth year
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Neil Pande03/01/20213,841.75148.88220.49851.442.053,738.552.76%CY2021 has had a slow start, followed by wall of fear of an impending crash, so the market will straddle the first two quarters. By the third quarter, vaccination roll out will have covered 60+% of the population, and this will increase growth in the market (service + retail growth). I expect 2021 to finish on a strong note with 2022 picking up the rally from where 2021 left off. The long term risk free rate will stay around 2%. I don't think the market is over-priced by a lot.
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Nick Fabbroni3/1/20213,841.75172.34200.2975%1.44%1.00%3,598.716.75%Wow -- apparently everyone here is a lot more optimistic about rates then I am. This is the S&P 500 ... not the Nasdaq. I expect the commodity guys to be wrong again, meaning low rates, and low prices (no super-cycle) and continued tech growth. This conviniently helps my portfolio, not the S&P500 at large. Considering I have no crystal ball, I'll go with my preferred reality until proven wrong
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Michael Livshiz2/26/02013,811.50169.18197.2075%1.44%2%3,127.8221.86%I fully expect continued GDP growth and an accelerated recovery starting in 2022 once herd immunity is reached. This will have an outsized impact on earnings forecasts, although companies will be cautious about extending dividends to shareholders. The big uncertainty for me is interest rates. While I can foree interest rates rising as GDP growth picks up, the Fed has been trying to get inflation over 2% for the past ten years with no luck. Interest rates have been historically low for this period and it's difficult to see them rise above 2%. In any case, the market is clearly overvalued but the % over-valuation can range from 14% to 25% assuming if the risk free rate stays within the narrow range of 2% to 3.5%.
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Houss El MarabtiMarch 1, 20213,897.57169.18197.2075%1.44%2.50%3,239.9920.30%
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Michael Arias3/1/20213,898.00180.00200.0080%%1.41%3%3,570.089.19%Estimating earnings, I decided to include a overly optimistic figure, over analysts consensus, believing a major rebound in the second half of 2021 when the majority of the US has been vacinated. In 2022, with COVID behind the majority of the world, the years of pent up demand will explode and at a minimum generate record earnings. With this growth I believe the risk free rate will increase to 3%, inflation will pick up a bit and the fed will be forced to raise rates. (although professor would disagree that the fed has any control). With the economy roaring back, companies will up reinvestments and hence the buy backs coming down to 80% from historical amount oif 97%.
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Matthew Senter3/1/20213,901.90169.18197.2075%1.44%2%3,341.4216.77%I'm going with the professor on this one, with updates to current S&P and riskfree rate
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Elliot Solomon3/1/20213,908.61167.25195.14801.44%2%3,316.4717.85%I believe the risk free rate will increase to 2% and remain there for the near future. I agree with that there will be accelerated GDP growth and recovery in the next year and near future.
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Jenna Link3/1/20213,901.82169.18197.2075%1.44%2.00%3,341.4216.77%
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Barbara Bai3/12/20213,939.34160.00200.0075%1.54%2%3,376.4216.67%Given the volatility of the year 2020 and uncertainty in 2021, I expect earnnings in 2021 will stay low but will jump to 200 in 2020.
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Selin Sahici3/14/20213,939.34168.81195.7880%1.64%2.50%3,229.4821.98%Increasing riskfree rates and not average earnings with higher (but not close to previous) cash flows as % of earnings
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Neil Pande3/17/20213,960.00197.20240.16851.642.14,077.34-2.88%Consumers will spend money in 2021 and 2022. The savings rate in USA has reached new highs and there has been a lot of pent up demand. This demand has been further aggravated by the hand-outs from the government (regardless of need). This will lead to an increase in spending, following by a over-heated economy.
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Senkawa9/28/20214,443.11200.00220.00851.542.53,894.9814.07%
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