Quote from JSL_Capital:
The current PE ratio, looking at it on an absolute historical term, seems fair to low. A quandary for investors to consider regarding the current situation is that many market tops in the past HAVE occurred during the so-called low PE points, which were preceeded by robust earnings growth periods. This is patently because the market cap. appreciations of those eras had been supported by even stronger earnings growth, but they were then followed by sharp drops in earnings. Likewise, many market bottoms have exhibited high P/Es because earnings dropped sharper than the mrk cps of stocks. Considering that the current market expansion has been supported more by the labor productivity than the labor growth, any slow down of the former will inevitably undermine the current economic growth. Exactly how many documents can a back office monkey (B.O.M) process per hour without starting to undermine the quality of his work, unless there is another leap in technology?
