With The Economy Tanking, Are Your Stocks Overvalued?

Yet, stocks are rising, putting investors in a conundrum. Advanced estimates from the Ministry of Trade and Industry point to Singapore’s Gross Domestic Product contracting 2.2% in the first quarter of 2020. The nation’s GDP is expected to shrink by as much as 4% for the full year.

"Investing isn't complicated. You buy stocks for less than intrinsic value.""How do you calculate intrinsic value?""That's complicated."Any good investor knows that you should buy stocks at a price less than what they are worth. How’s the business doing? “Just giving the numbers is like describing people using their body temperature”Before you can value a stock, you need to know the business behind it.

Amazon , for instance, has morphed from being a bookseller to selling almost everything under the sun. Amazon Web Services has also opened up new possibilities for the company that were not fully visible until 2015. As Josh Brown, CEO of Ritholtz Wealth Management, once said “We’re all just guessing, but some of us have fancier math”. Making assumptions on what is going to happen in the next few months is hard.

If new COVID-19 clusters emerge, the government may be forced to enforce the circuit breaker measures again. But if I had to guess, stock prices today are reflecting the possibility of a recovery in the near term.

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