October reminded me that market timing is fool's gold: Aswath Damodaran

NEW DELHI: As Wall Street posted its best month in more than 45 years, valuation guru Aswath Damodaran on Tuesday said October’s performance proved that timing the market is a fool’s job.

“October 2022 was a reminder that market timing is fool’s gold, as a month that started in despair ended with the S&P up more than 8%,” Damodaran tweeted.

He said the implied ERP (equity risk premium) dropped from 6.21% to 5.48%, and stocks are now priced to earn 9.53%.

Giving signs of bottoming out, the Dow Jones rallied 13.95% in October, which turned out to be its best month since 1976.

Ahead of the US midterm poll next week, analysts would be tracking the outcome of the US Federal Reserve Bank meeting on Wednesday, the Bank of England (BoE) rate hike decision on Thursday, ongoing earnings season and the US jobs report on Friday.

Although the Fed is widely expected to raise interest rates by 75 basis points, investors are hoping that the Fed will consider a deceleration in interest rate hikes in the future.

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