Price earnings ratio is based on average inflation-adjusted earnings from the previous 10 years, known as the Cyclically Adjusted PE Ratio (CAPE Ratio), Shiller PE Ratio, or PE 10
Posted on 09/05/2019 1:37:02 PM PDT by ChicagoConservative27
Naw. The market is only a little higher than the historical P/E ratio. Corporate earnings are really good. So the price is high but so are earnings. I’m mid career so I have time to recover if I’m wrong.
https://fortune.com/2019/07/31/yes-stocks-are-overvalued-but-by-how-much-heres-what-history-tells-us/
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https://www.independentadvisorthayes.com/investing-overpriced-stock-market/
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https://www.barrons.com/articles/who-says-this-market-is-overpriced-1525716705
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https://www.marketwatch.com/story/this-stock-market-indicator-hasnt-been-so-inflated-since-the-internet-bubble-top-2018-09-18
Want more?
You are missing the point.
Fact #1 - China can not AFFORD to lose 10 million+ manufacturing jobs by agreeing to a deal to balance the trade.
Fact #2 - Since there are never TWO winners in any war since recorded history, someone will have to lose in this trade WAR.
Fact #3 - Trump does not like to lose, and China can not afford to lose. Therefore the only option left for China is to HOPE for a democrat president in 2020.
I can bet half of my social security check that China will try to keep negotiating until November 2020. So long as China is “negotiating” Trump can not simply stop the negotiations because of political optics & effect on stock market.
ok and? I might get a sweet buying opportunity. just like last time.
Price earnings ratio is based on average inflation-adjusted earnings from the previous 10 years, known as the Cyclically Adjusted PE Ratio (CAPE Ratio), Shiller PE Ratio, or PE 10
“Want more?”
Three of those linked articles are all based on exactly the same metric, Robert Shiller’s cyclically-adjusted price-to-earnings (CAPE) ratio.
The Barron’s article also looks at the CAPE ratio but concludes that it’s misleading. And in fact it contradicts the claim that the market is overpriced:
“..people are looking at the CAPE [cylically adjusted P/E] ratio, which looks really expensive using the average of the past 10 years. Of course it does, because it includes 2008 and 2009. As soon as that rolls forward, the P/E falls.”
“Today, on the real earnings yield, the market is almost exactly at its long-term average.... Right now, our 10-year expected return is 7% [a year]. A lot of our competitors have an average expectation of 5% to 6%, because they say the market is at a high valuation.”
That’s fine...but I can look at many specific stocks & their respective metrics and see that there’s no way they’re expensive. It depends on the market sector - as a whole I don’t believe the entire market is in a big bubble.
For your sake and mine, I hope you’re right.
If you have a million in the dow a 10k increase would increase it to $1.4 mil. Right?
How dumb do you think DJT is?
He knows this already. What I am hoping for is a deal soon to get him re-elected and then much harder negotiations when they break the deal right after the election.
The best of both worlds.
I’m more concerned with America’s debt and global debt. Some day, this things gonna pop. I don’t see how we can keep borrowing from countries that are up to their eyeballs in debt.
Furthermore, indefinite low interest rates give savers no safe haven for their funds. Raise rates...sink the economy with stiff rise in interest payments on the national debt.
Let’s get it started in here! My 457 could stand a kick in the pants before I retire next year.
2. Yes, someone will lose. Because Trump is a hard ass, it won't be us.
3. As stated previously, China is not stupid, they know he is going to win in 2020. They don't believe in unicorns either.
4. You're going to lose a lot of money.....
See #.
The markets will continue to rise and fall, of this I have no doubt.
However, history tells us that on average the markets advance 2 of every 3 days.
A long term view in a balanced and managed portfolio will succeed.
Money needed in next 5 yrs should neverbe invested.
The stock market could crash if Donald Trump is elected president (Marketwatch November 1, 2016)“…the election of Donald Trump in the U.S. — would likely cause the stock market to crash and plunge the world into recession.”
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A Huge Hedge Fund Says Stocks Will Crash if Donald Trump Wins (Fortune November 8, 2016)
“If Donald Trump wins the election, kiss your 401(k) goodbye.”
Some one MUST lose in a trade war. Trump holds all the trumps. There never have been TWO winners in any war since recorded time.
Only reason market is levitating at heights before the crash in 1929 is..........ARTIFICIAL low interest rates. Federals have the tiger by the tail. If they bring rates back up to level based on real inflation, the gov’t can not afford to pay the interest on $23 Trillion debt. And it will crash the market.
Even more scary is level of debt not just by the US gov’t, but add to that student debt, credit card debt, mortgage debt (which is high due to inflated values of hard assets), and debt all over the world.
High debt requires that economies operate at high levels. If any hiccup occurs the debt kills the debt holders.
Me losing money? I doubt it, because I am heavy in bonds and there is zero chance of FED increasing rates until Nov 2020.
First the crash os ‘29 was caused by insane margin buying. Back then there were no restrictions and investors could margin 100% of their equities.
As for our debt? AS an old ex banker, the thinking went like this.
If you owe the bank a million dollars and can’t pay it back, you are in trouble.
But if you owe the bank a trillion dollars and can’t pay it back the bank is in trouble.
In today’s world we are the borrowers and the world (China, Japan, etc) is the bank.
If any major country in Asia (and that includes all countries in Asia from Turkey on to Japan) gets in financial meltdown mode, like always before in history the effects are felt here as well.
Nothing much to worry about at least until election 2020 is over. FED won’t raise the rates, China will pretend to keep negotiating, there are no hot wars anywhere, Putin & Trump seem to get along fine, and US consumers are spending.
If Trump loses (less likely) all hell breaks lose.
If Trump wins (more likely) China is in big trouble.
And so will be Iran and the democrats will require counseling.
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