What is the "Euphoriameter"?

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The Euphoriameter combines 3 key gauges of investor sentiment:

-Surveyed Sentiment (Bulls) i.e. the bullish sentiment readings from investor surveys (or how optimistic investors say they are)

-Forward PE Ratio i.e. price vs next 12 month consensus earnings (basically a reflection of the relative degree of confidence in future earnings growth)

-The VIX i.e. implied volatility (whether conditions are in panic mode or complacency)

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The composite view is designed to give an indication of the level of "euphoria" or otherwise in the market, and has given key insight into the market at turning points.

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Last updated: 21 June 2024

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