Cash as % of GDP near all-time high – Fear reigns supreme . . .

$10.65 Trillion and counting.  Money of Zero Maturity (MZM) is flirting with a record high percentage of nominal GDP.  The Euro crisis and weak U.S. political leadership is serving to keep an unprecedented amount of cash on the sidelines earning zero return.  It is no surprise that economic growth is sluggish and unemployment remains stubbornly high.  Jeb Terry, Sr. Dec 13, 2011

Aberdeen Investment Management – a guide service for micro-cap technology investment

U.S. stocks near all-time low valuation compared to Treasury rates . . .

I have updated the calculation of the degree to which stocks are undervalued relative to the 10 year Treasury rate.  The earnings yield on the S&P 500 (reciprocal of the P/E ratio) recently exceeded the yield on the 10 year Treasury by 6.4 percentage points. This was a record spread as can be seen in the first chart below.  Wide spreads are associated with periods of extreme undervaluation of stocks which is calculated in the 2nd chart.  The S&P 500 is over 70% undervalued.  We have never seen this degree of undervaluation.  The reasons for the extreme undervaluation of equities can be debated.  The set of circumstances that will force the relative valuation to return to a more normal level can also be debated.  The math however is straightforward.  Either interest rates go up a lot, earnings come down a lot or equity prices go up a lot or some combination of all three must occur.  If history is a guide, we won’t have to wait long to find out which variable(s) change the most. History suggests that equity price appreciation is the dominant variable and that it goes up significantly in the next 180 days following a spike in the degree of undervaluation.  Jeb Terry, Sr. Dec 13, 2011

Aberdeen Investment Management – a guide service for micro-cap technology investment

Time spent on mobile phones jumped 30% from 2010. . .

EMarketer recently reported the following  . . . Consumers now spend more than 1-hour per day engaged with their mobile phones.  This means that US adults now spend more time with their mobile phones than with print magazines and newspapers combined, at 1 hour and 5 minutes vs. just 44 minutes.  The amount of ad spending going toward internet and mobile channels does not yet reflect the amount of time consumers have invested in these areas of their lives.  Mobile, for example, has a more than 10% share of adults’ media time each day, but less than 1% of ad dollars.  The disparity in ad dollars vs. time engaged with the media will be rectified in time and will result in billions of ad dollars shifting to mobile marketing – which is a primary focus for Aberdeen.  Jeb Terry, Sr. Dec 13, 2011.

Aberdeen Investment Management – a guide service for micro-cap technology investment