How the FPI Market Index works

For every stock in the universe we compute the gap to fair value: (market price − fair price) / market price × 100. A positive gap means the stock trades above its fair value (downside); a negative gap means below (upside).

The index is the median of those gaps — median, not mean, so a handful of extreme model outputs can't drag the reading. Each stock's fair price blends DCF analysis (50%), relative valuation against sector peers (30%), and analyst consensus (20%), recalculated daily.

The index currently covers 1017 stocks — 917 listed in the United States and 100 in Europe. A stock enters the daily calculation only when its model output passes sanity checks (extreme deviations are treated as broken data and excluded). Sector medians require at least 3 stocks per sector.

KNOWN LIMITATION: the European sample is currently much smaller than the US sample, so the European median is indicative rather than definitive. PLANNED (methodology v2): explicitly defined universes — top ~1,000 US and top ~600 European stocks by market cap with quarterly rebalancing — and country-level breakdowns. Changes will be versioned on this page, never silent.

· The index is a long-term valuation signal, not a market-timing tool — markets can stay stretched for years.

· Fair values are model outputs; sectors where standard valuation applies poorly (early-stage biotech, some financials) are underrepresented by design.

· The universe skews toward liquid, covered names; micro-caps are not the index's job.

· History starts in 2026 — treat long-horizon comparisons accordingly.