S&P 500 Over Priced. PE Ratio is Now at 129

[Daal]

Quote from ralph00:

The Fed has printed and the Treasury spent literally trillions of dollars over the past 12 months. With this kind of printed money floating around, there is no reason why the DJIA can't be at 15K by years end. It doesn't mean anything because the dollar is essentially worthless at this point, but its crazy to short the market in this environment.

What money printed are you referring to?Bank reserves are not really money, only if they get lended out they can create inflation. M1 and M2 growth YTD has been weak, specially M2(less than 3% annualized YTD). Inflation expectations are not out of line(10y breakeven is less than 2%, surveys dont show inflation concern), this stock market boom has nothing to do with inflation fears

 

[gkishot]

Quote from covered_call:

This is a silly way of interpreting PE. This is looking at actual earning which are irrelevant. I don't buy a stock to participate is its earnings from last year. Whomever owned it at that time participates in trailing earnings. I don't care what the company I own made last year. What will it make next year? That is the metric of interest. Forward looking PE is a much more valuable metric.

The article does go on to point to forward PE of 70, which is rich, but normalization won't occur overnight. I agree the market has a boatload of issues to face going forward, but arguing using pe based on trailing earning is a bad metric and evern more so during a recession.

The data on the chart makes sense for all previous years. So why the calculations on the chart in your opinion are way off for this year? They have to be consistent with the previous results. Meaning they had to use same type of calculations across the board.

 

[Stewenson133]

Quote from covered_call:

This is a silly way of interpreting PE. This is looking at actual earning which are irrelevant. I don't buy a stock to participate is its earnings from last year. Whomever owned it at that time participates in trailing earnings. I don't care what the company I own made last year. What will it make next year? That is the metric of interest. Forward looking PE is a much more valuable metric.

The article does go on to point to forward PE of 70, which is rich, but normalization won't occur overnight. I agree the market has a boatload of issues to face going forward, but arguing using pe based on trailing earning is a bad metric and evern more so during a recession.

my view