And the stock proceeded to go up 2.71% today.
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Why is no one talking about the S&P500 P/E ratio?
- Thread starter MrDODGE
- Start date
And the stock proceeded to go up 2.71% today.
Quote from MrDODGE:
You know the one I am talking about. The one that calculates the valuation of the S&P500.
Does this seem normal to anyone?
No, it doesn't. And it doesn't match any P/E chart - for any period of time it covers - that I've seen.
What is the methodology of those numbers? Without knowing that, I'll put this one in the discard pile.
Quote from OldTrader:
One of the latest estimates of 2010 earnings for the S&P500 that I've read is $73. So take your multiple times the $73. Using 16 for instance gives you 1168 on the S&P500.
OldTrader
This is where I think we're in trouble, because those estimates are everyone's best guess of what 'new normal' earnings are going to look like.
Consumers are still losing jobs, houses, and net worth. He is on his back for the foreseeable future - a condition unprecedented in the lifespan of almost every forecaster. Plus, it is just bad form to be too negative right now ...
We are in for a wave of serious earnings disappointments in the not-to-distant future I'm afraid.
Quote from piggie2000:
Nobody is talking about the ratios because cnbc and the media is in full hype mood to get even more people sucked into his trap. This is the most irrational rally of all time due to it being almost impossible for earnings to snap back huge to justify prices due to 10% umemployment and trillions of $ of credit being gone forever.at least in 1999 earnings were skying and one could dream.how can jpm be worth more than in 2007when the dow was 14k and business booming? also until the last few days there was no coverage about any concern with the mkt being up 50% in 5 months
good
It's reasonable to expect a different result since your "index" components and calculation methodology are not the same as the S&P 500.Quote from Sky123987:
I took 600 of the most liquid stocks, and found that the average Earnings TTM was 1.39 / share, and the average price was $41.
I don't see who that equates to a P/E ratio of 120
At June 30th, the S&P 500 had P = 919.32 and E = 7.74, producing a PE = 119.
Quote from Dacamic:
It's reasonable to expect a different result since your "index" components and calculation methodology are not the same as the S&P 500.
At June 30th, the S&P 500 had P = 919.32 and E = 7.74, producing a PE = 119.
Trailing as was pointed out is irrelevant. Forward earnings are substantially higher than this. A better metric might be historical price to book value ratios. Book value's have been below 1 for several months up until the end of may, and are usually 50% over 1.
My previous post was intended to simply talk about the calculation, rather than comment on relevance; nonetheless, I agree the current PE -- while interesting -- probably lacks significant meaning (I prefer a ten-year moving average).Quote from bwolinsky:
Trailing as was pointed out is irrelevant. Forward earnings are substantially higher than this. A better metric might be historical price to book value ratios. Book value's have been below 1 for several months up until the end of may, and are usually 50% over 1.