Comments on: Chart of the Day: S&P500 P/E Ratio http://www.ritholtz.com/blog/2009/08/chart-of-the-day-sp500-pe-ratio/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Tue, 14 Feb 2012 20:08:08 +0000 hourly 1 http://wordpress.org/?v=3.0.5 By: A Riddle Wrapped in an Enigma « Uncommon Sense http://www.ritholtz.com/blog/2009/08/chart-of-the-day-sp500-pe-ratio/comment-page-1/#comment-218823 A Riddle Wrapped in an Enigma « Uncommon Sense Thu, 24 Sep 2009 20:44:05 +0000 http://www.ritholtz.com/blog/?p=36162#comment-218823 [...] at P/E.  When current price is over 100 times earnings, you have to be concerned.  Take a look at this chart from late August, and tell me that it’s not scary!  Obviously, prices have not dropped as [...] [...] at P/E.  When current price is over 100 times earnings, you have to be concerned.  Take a look at this chart from late August, and tell me that it’s not scary!  Obviously, prices have not dropped as [...]

]]> By: The Almighty Dollar :: ASPO-USA: Association for the Study of Peak Oil and Gas http://www.ritholtz.com/blog/2009/08/chart-of-the-day-sp500-pe-ratio/comment-page-1/#comment-211620 The Almighty Dollar :: ASPO-USA: Association for the Study of Peak Oil and Gas Thu, 03 Sep 2009 16:30:40 +0000 http://www.ritholtz.com/blog/?p=36162#comment-211620 [...] 1 — Barry Ritholzt’s Chart of the Day: S&P 500 PE Ratio from August 21st. “The price investors were willing to pay for a dollar of earnings increased [...] [...] 1 — Barry Ritholzt’s Chart of the Day: S&P 500 PE Ratio from August 21st. “The price investors were willing to pay for a dollar of earnings increased [...]

]]> By: tjsingh http://www.ritholtz.com/blog/2009/08/chart-of-the-day-sp500-pe-ratio/comment-page-1/#comment-210775 tjsingh Tue, 01 Sep 2009 09:23:40 +0000 http://www.ritholtz.com/blog/?p=36162#comment-210775 If I look at SPY P/E ratio, it shows 14.09 as of June 30, 2009. SPY was 909 at that time. Now it is 1028. Assuming flat earnings P/E is roughly 15.93. Therefore I don't understand why P/E ratio of S&P 500 is over 100.. If I look at SPY P/E ratio, it shows 14.09 as of June 30, 2009. SPY was 909 at that time. Now it is 1028. Assuming flat earnings P/E is roughly 15.93. Therefore I don’t understand why P/E ratio of S&P 500 is over 100..

]]> By: Trading Eights » Why Some Economists Still Aren’t Smiling http://www.ritholtz.com/blog/2009/08/chart-of-the-day-sp500-pe-ratio/comment-page-1/#comment-210613 Trading Eights » Why Some Economists Still Aren’t Smiling Mon, 31 Aug 2009 18:27:53 +0000 http://www.ritholtz.com/blog/?p=36162#comment-210613 [...] for a lot more than their companies are earning, beware. The historic P/E average is 15. Right now, it’s 100+! Even if you use the more stable “operating earnings” because you think reported earnings have [...] [...] for a lot more than their companies are earning, beware. The historic P/E average is 15. Right now, it’s 100+! Even if you use the more stable “operating earnings” because you think reported earnings have [...]

]]> By: constantnormal http://www.ritholtz.com/blog/2009/08/chart-of-the-day-sp500-pe-ratio/comment-page-1/#comment-207874 constantnormal Sun, 23 Aug 2009 13:58:05 +0000 http://www.ritholtz.com/blog/?p=36162#comment-207874 How does this compare to the peak NASDAQ 100 PE during the dot-com bubble? How does this compare to the peak NASDAQ 100 PE during the dot-com bubble?

]]> By: farmera1 http://www.ritholtz.com/blog/2009/08/chart-of-the-day-sp500-pe-ratio/comment-page-1/#comment-207806 farmera1 Sun, 23 Aug 2009 02:10:40 +0000 http://www.ritholtz.com/blog/?p=36162#comment-207806 Bubble what bubble. All bubbles are liquidity driven. Need we look any farther to find where a lot of that liquidity is going now. So we have the following bubbles or bubble wanna be's as I see it. 1. Debt (that lovely exponential graph of Total US debt vs GNP) 2. Stock market (see above) 3. Commodities (oil, sugar, maybe with a touch of grain and farm land) At the same time there is deflation going on in many areas of the economy, like housing, wages, nat gas, dairy industry etc. How can anyone invest in this market. Trade yes, invest no. What might one call this environment. Rolling Bubblicious economy. An inflating, deflating economy. Bubble what bubble.

All bubbles are liquidity driven. Need we look any farther to find where a lot of that liquidity is going now. So we have the following bubbles or bubble wanna be’s as I see it.

1. Debt (that lovely exponential graph of Total US debt vs GNP)
2. Stock market (see above)
3. Commodities (oil, sugar, maybe with a touch of grain and farm land)

At the same time there is deflation going on in many areas of the economy, like housing, wages, nat gas, dairy industry etc. How can anyone invest in this market. Trade yes, invest no.

What might one call this environment. Rolling Bubblicious economy. An inflating, deflating economy.

]]> By: dbneal http://www.ritholtz.com/blog/2009/08/chart-of-the-day-sp500-pe-ratio/comment-page-1/#comment-207746 dbneal Sat, 22 Aug 2009 21:37:32 +0000 http://www.ritholtz.com/blog/?p=36162#comment-207746 There should be a spike in the 1981 recession too as I think corporate earnings dropped to nothing or went negative meaning PE is infinite (Price divided by zero is infinity). In recession, investors are considering more normalized earnings power. Stocks therefore don't drop to zero in sharp recessions. Just think, when the S&P was about 1400 before this latest crash, that was based on earnings that were, to some extent, illusory due to poor quality of earnings, massive debt increases/securitization PLUS a very high price applied to those illusory earnings!! Now back at S&P 1000, we're at quite high valuations AND a highly risky/uncertain environment. It just goes to show you how out-of-whack 1400 was. There should be a spike in the 1981 recession too as I think corporate earnings dropped to nothing or went negative meaning PE is infinite (Price divided by zero is infinity). In recession, investors are considering more normalized earnings power. Stocks therefore don’t drop to zero in sharp recessions.

Just think, when the S&P was about 1400 before this latest crash, that was based on earnings that were, to some extent, illusory due to poor quality of earnings, massive debt increases/securitization PLUS a very high price applied to those illusory earnings!! Now back at S&P 1000, we’re at quite high valuations AND a highly risky/uncertain environment. It just goes to show you how out-of-whack 1400 was.

]]> By: alfred e http://www.ritholtz.com/blog/2009/08/chart-of-the-day-sp500-pe-ratio/comment-page-1/#comment-207701 alfred e Sat, 22 Aug 2009 15:12:00 +0000 http://www.ritholtz.com/blog/?p=36162#comment-207701 Just goes to show what SLP and PPT can do. Looks strikingly familiar to the oil run-up of last year. Just shows you what market moving speculators can do to the rest of us sheeple. Just goes to show what SLP and PPT can do.

Looks strikingly familiar to the oil run-up of last year.

Just shows you what market moving speculators can do to the rest of us sheeple.

]]> By: Haigh http://www.ritholtz.com/blog/2009/08/chart-of-the-day-sp500-pe-ratio/comment-page-1/#comment-207660 Haigh Sat, 22 Aug 2009 12:13:52 +0000 http://www.ritholtz.com/blog/?p=36162#comment-207660 "I’m waiting to hear some “it’s different this time…” so I can get shorter than my already midget self." Here's the difference: http://blogs.wsj.com/economics/2009/07/16/a-look-inside-feds-balance-sheet-71609-update/ If you eliminate short duration event driven down spikes, the flood of liquidity is going to have to find a home. Few pools are as big as the US stock market, big enough to take the global liquidity tsunami when it wants to rush away from computer created currency. “I’m waiting to hear some “it’s different this time…” so I can get shorter than my already midget self.”

Here’s the difference:

http://blogs.wsj.com/economics/2009/07/16/a-look-inside-feds-balance-sheet-71609-update/

If you eliminate short duration event driven down spikes, the flood of liquidity is going to have to find a home. Few pools are as big as the US stock market, big enough to take the global liquidity tsunami when it wants to rush away from computer created currency.

]]> By: How the Common Man Sees It http://www.ritholtz.com/blog/2009/08/chart-of-the-day-sp500-pe-ratio/comment-page-1/#comment-207655 How the Common Man Sees It Sat, 22 Aug 2009 10:58:17 +0000 http://www.ritholtz.com/blog/?p=36162#comment-207655 <i>Barry, I think the business to be in now is rose-colored glasses. </i> I think we should move straight to the cyanide pills Barry, I think the business to be in now is rose-colored glasses.

I think we should move straight to the cyanide pills

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