[shred]

On what do you base your P/E evaluation?

My numbers show that the trailing P/E of the S&P
excluding one time charges is about 18. With
interest rates this low, that's certainly within
historical norms.

[Soren]

I have to admit I've seen a variety of numbers, mostly ranging from 26-40. The 34 I quoted was based on info supplied by a freeper today for the S&P 500 as of Friday's close and confirmed from a separate source here. These numbers are in line with numerous other citations I've seen. My guess is the variation is due to how earnings are calculated: trailing versus projected, pro forma versus GAAP, etc. What is the source of the 18 you mentioned?

[Soren]

Followup to my previous post. I noticed you mentioned "excluding one time charges" and the source I linked to is on a GAAP basis. That would be a huge difference between GAAP and pro forma! When comparing to historical P/E levels, I would be inclined to rely more on GAAP, because historically the use of pro forma earnings was not nearly so prevalent as it is today, so the historical P/E levels are probably more representative of a GAAP basis. Still, I'd be interested in looking at the source of your number.