Historic P/E Ratio for the S&P 500
By Barry Ritholtz - March 6th, 2009, 8:15AM
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Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
March 6th, 2009 at 8:50 am
Says it all about the “wisdom of the market.”
March 6th, 2009 at 12:39 pm
It is very revealing.
2000, not 2007 was really 1929. It’s later than many people think.
More compression in store chaps, look at the late 30s and the 70s.
The 70s really were a bitch, weren’t they??
March 6th, 2009 at 6:14 pm
Fleckenstein said in the 2000-2003 markets that Greenspan’s actions were only delaying the ultimate direction and destination that the markets would go… I remember him saying that when he was commentating on Realmoney. And he said the delay would cause more pain. 2 for 2… It’s all come true.
March 8th, 2009 at 11:34 pm
This is a perfect chart. Very telling.
What would you all say is an appropriate P/E ratio for the S&P now given future earnings expectations?
10? 8?
April 11th, 2009 at 9:31 pm
By downloading the accompanying table/spreadsheet and adding a columns for the 2yr simple moving average (SMA) of the P/E ratio and 10*Log of the S&P 500 price, I plotted 2yr SMA and 10log Price by date. Interestingly, market timing using sharp reversals of the P/E SMA over the last 82 years was nearly ideal with 11 periods in and out of the market.