The Four Phases Of A Valuation Cycle

The four phases of a valuation cycle are shown in the chart below:

Click to enlarge

Four Phases of Valuation Cycle

Source: Global Investor 1.14 – Europe, August 2014, Credit Sussie

According to this CS report published earlier this year, European stocks are in the “Optimism” cycle and should get to the “Reality” cycle soon as earnings and macroeconomic fundamentals improve.

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