5 ms·
Absolutely. While most people are looking at an expensive stock market (median price to earnings for S&P500 is higher than in 2000), the real action next time m
by unknown_apostle 11y ago
Absolutely. While most people are looking at an expensive stock market (median price to earnings for S&P500 is higher than in 2000), the real action next time may happen in the broad bond markets.
Just verbal speculation of course, but it remains hard to swallow that Italy borrowing for 10 years at 1.61% or Japan at 0.27% accurately reflects the full long-term risk of the single-point-of-failure policy of central bank buying.
- lintiness 11y agowhere do you get your median pe ratio? http://www.multpl.com/ http://www.multpl.com/ that's the spu's total pe ratio, and it's about half what it was in 2000.
- unknown_apostle 11y agoBe careful with "raw" PE ratio. It peaks when earnings have already collapsed due to the denominator effect. Median of S&P500 price/sales (not quite the same as median of price/earnings of course): http://mebfaber.com/2015/03/13/stocks-are-the-most-expensive-since-the-1960s/ http://mebfaber.com/2015/03/13/stocks-are-the-most-expensive... Median of price/earnings for the broad NYSE universe: http://www.hussmanfunds.com/wmc/wmc150112.htm http://www.hussmanfunds.com/wmc/wmc150112.htm I don't think it's controversial to state that high valuations in equities are more broadly carried. (Hussman's weekly column is an interesting source of opinions on where these broad valuation measures stand at any given time.) Obviously, that doesn't automatically imply that any sort of deep loss is imminent. I believe it does say something about what you can reasonably expect in terms of long term total returns.