big-time hedge fund manager Ubben giving money back market overvalued: ValueAct's Jeff Ubben, one of the most-respected activist hedge fund managers out there, is returning capital to his investors because he is concerned about the stock market's high valuation.
"The broader market context is explicit to us. The S&P 500's median P/E ratio is 18 times. For most high quality companies we follow, it is much higher," Ubben wrote in the April 3 letter to clients. "These valuations can only be justified by assuming cyclically high corporate margins will persist, a certainty of lower corporate tax rates and a risk-free rate that stays near all-time lows. We are skeptical of all of the above."
"The broader market context is explicit to us. The S&P 500's median P/E ratio is 18 times. For most high quality companies we follow, it is much higher," Ubben wrote in the April 3 letter to clients. "These valuations can only be justified by assuming cyclically high corporate margins will persist, a certainty of lower corporate tax rates and a risk-free rate that stays near all-time lows. We are skeptical of all of the above."