The Vershire Model

On October 11, 2007 the S&P 500 hit an intraday record high of $1,576.09. Seventeen months later, on March 9, 2009 (battered by the financial crisis kicked off by the Lehman Brothers bankruptcy) the S&P closed at a paltry $676.53.

Does anyone really believe that it took 231 years to create the level of wealth represented in the stock market up until October 2007, and it took just 17 short months to wipe out more than 50 percent of that wealth?

The stock market is clearly more volatile than the value it represents. Consequently, there will be times when the market is selling above true value and times when it is selling below true value. Those investors who can recognize these times can use this knowledge to avoid the worst calamites and cash in on the greatest rallies.

Furthermore, identifying these turning points is not easy; but it is not as difficult or mysterious as some presume. We will show that identifying these turning points in the market is very possible if you follow a no-nonsense approach based on fundamental principles.

We conducted almost a 70-year study of the stock market and developed a model that is both simple and comprehensive. This model has an excellent track record of identifying mispriced markets.

Up until now, we provided the Vershire Model exclusively to our premium subscribers. Right now, we are sharing it with all those who visit our website. You now have the opportunity so use what, up until now, we shared only with a select few. Click the link below to learn the details of this model and to read the study that spawned it.

If you would like to learn what this very enlightening model is saying right now, click the button below. By clicking this button, you will calculate the output of the Vershire Model based on the most recent inputs available (because of the delay in some markets, the “most recent available inputs” are usually from the previous trading day).

Updated Output

Inspiration for more Common-Sense Analysis

If history is any guide, the Vershire Model, without any modifications, should be very effective at timing the market. But the main reason we present the Vershire Model is not to encourage you to use it without any modifications. The main reason we present it is to demonstrate that common-sense analysis is not a waste of time. We want to inspire you to do even more common-sense analysis.

The Vershire Model is one of the most powerful and reliable models of stock market value we know of. But all simple models are a starting point, not an ending point. If you put in the work to refine the Vershire Model, you can develop an even more accurate estimate of the true value of the stock market.

We know because we have already done it. If you would like to see the product of our work, log into your account and access the link entitled “Stock Market Outlook.” In this section, you will see our latest and best estimate of the true value of the stock market.