I am obviously not Jim (Mungofitch), but I run my portfolio tracking two primary metrics: Price and intrinsic value. I use Jim's method to calculate the intrinsic vaule of my QQQE holding. I did this the last time in June (and yes, I know, we are in August, but bear with me. I think the basic assessment is still true).

To estimate the fair value of the QQQE ETF, I adapt the top-down framework Jim shared on the Motley Fool board: discussion.fool.com - Ot bond funds.

Jim established a baseline fair value of $65.00 for QQQE in June 2022 (when the U.S. Consumer Price Index was 292.3). To update this valuation over time, the formula accounts for both real trendline earnings growth and CPI inflation:

Fair Value = $65.00 × (1 + Real Growth Rate)^t × (Current CPI / 292.3)

Step-by-Step Math for my calculation for June (June 2022 to June 2026)

* Exact Time Horizon (t): June 2022 to June 2026 = 4.00 years
* Baseline CPI: 292.3 (June 2022)
* Actual CPI:333.952
* CPI Inflation Multiplier: 333.952 / 292.3 = 1.1425 (14.25% inflation)

In his original discussion, Jim noted an 8.2% annual real growth rate for the underlying trendline earnings, along with the impact of dividend reinvestment (he mentioned 0.5%, I took 0.7% yield).

* Price-Only Fair Value (8.2% Real Growth):
* Real Growth Factor: (1.082)^4 = 1.3708
* Fair Value: $65.00 × 1.3708 × 1.1425 = $101.80

* Total Return Fair Value (8.9% Total Real Growth incl. ~0.7% Dividends):
* Total Real Growth Factor: (1.089)^4 = 1.4063
* Fair Value: $65.00 × 1.4063 × 1.1425 = $104.44

With QQQE currently trading near $122, the ETF appears clearly overvalued relative to its fundamental earnings trendline—trading at roughly a 17% to 20% premium above its total return fair value range ($102 – $104).

Two Key Model Assumptions:
1. QQQE was indeed fairly valued at $65.00 in June 2022.
2. 8.2% per year represents the true underlying real compound growth rate of the equal-weighted index.

My takeaway strategy:
1. Lower expectations for medium-term forward returns from current price levels.
2. And/or: Maintain a cash buffer to deploy if and when a broader market correction occurs.

Interestingly, a similar overvaluation dynamic exists in the Swiss Performance Index (SPI). While the SPI is heavily weighted toward mature "value" megacaps (Nestlé, Roche, Novartis, Zurich Insurance, Swiss Re...), market pricing remains equally elevated relative to trendline valuation.

However, we have a good explanation/excuse: Swiss interest rates remain exceptionally low, with the Swiss National Bank (SNB) keeping its policy rate at 0.0%.

PS: Maybe Jim can check my math. After all, I "stole" the model from him... :-) Thank you!