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Valuation has become one of the major reasons that the bulls point to when buying stocks, but if you look at past troughs during bear markets you’ll notice that the stock market has never bottomed at such a high valuation during  after a major cyclical bear market.  According to Case Shiller’s rolling PE ratio the stock market PE is currently 15.8 – not expensive, but nowhere near past bear market troughs.  This is consistent with Clarium Capitals findings.  The long-term bulls are trying to argue that it’s “different this time”, but don’t bet on it….


One comment
  1. Onlooker

    Trying to argue that this market is cheap at this point, in the face of these economic conditions, is either intellectually dishonest or stupid, IMO. We just haven’t wrung out of investors the same bogus thinking that led to the 2000 & 2007 tops.

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