I recently did a calculation on several stock markets, using a scoring method comprising valuations vs history, macro and micro factors. My observations are as follows:
1. Valuations wise, we are beyond mid point for developed countries. Only CHINESE stocks are cheap. Many ASEAN markets are a SELL.
2. However, macro and monetary factors are likely to push valuation re-rating to higher levels. We are likely to push another 10 - 20% higher before we face a significant correction sometime in 2014.
3. If you include macro and monetary factors, a few markets are considered attractive (>30% upside), e.g. CHINA, MINING SECTOR, KOREA, and EUROPE.
4. US and JAPAN are considered somewhat attractive (20-30% upside). Although not cheap, their monetary policies are still extremely expansive. Their GDP and earnings growth momentum are also likely to push stocks higher.
5. Two markets appear to be a SELL. Philippines and Malaysia appear to be overly expensive, with macro growth slowing down and monetary policies tightening.
