The "Q Ratio"

[Waz]

Has anyone ever heard of this? I just read a book called "Valuing Wall Street" that covers the use of the Q-ratio. Basically, Q is the ratio of total market capitalization to total book value, for the market as a whole. The book states that there are many times when the market is clearly overvalued because the Q ratio becomes too large. It's a great book to gauge whether or not to invest or pull out of the market at any given time.

Has anyone seen or heard of this?

 

[Fishhead]

Never heard of it.....sorry.

Sure somebody here has though.

 

[Waz]

Never heard of it.....sorry.

Sure somebody here has though.

I'm not sure if anyone will have heard of this or not. Based on the book, it doesn't seem like it is often talked about. However, it appears that this may be a very bad time to be in the market based on it's findings (heavily overvalued).

I just wanted to see what anyone else thinks about it, if indeed they have heard of it.