Valuing the NDX

Discussion in 'Index Futures' started by bwolinsky, Sep 9, 2008.

  1. Hi, so I spent tonight valuing the NDX or the NASDAQ100. I gathered the closing prices and the shares outstanding for each company. Multiplied them all together and added them up for the value of the index.

    If I could do this in real time, which apparently is a subscription costing $10,000 per year, it might yield a true risk arb system.

    But anyway. I decided to gather the target prices from Standard and Poors research.

    If every one of their predictions comes true, then the NDX is valued, per the S&P, 24.42% below fair value currently.

    That'd put the NDX at 2193.42 in the next twelve months. Does anyone think this might be a tad overbullish?

    One of the disgusting things I was finding with the S&P's research is that it seemed bullish in nearly every case for these NASDAQ companies.

    I'm wondering if anyone else has ever traded based on S&P research. I think it's a tad tainted given their loss of credibility following the credit market debacle of late.

    Thoughts about the methodology?