You do understand that P/E's are not static..IOW, P/E's at market tops look solid and then a recession hits (or look at energy companies for comparison sake) and then the market might be 10-20-30% off its highs and earnings crumble. The better P/E's have been distorted by corporate buybacks and ZIRP (7 years and running). You also seem to conveniently ignore 2000-01 and the destruction of the tech sector. Many of those component stocks were loved at the top, hated at the bottom (no longer existed by 2003). Truth be told, there's been very little negativity, proportionally speaking, to what has been occurring in equity markets worldwide. Most people have been buying the dips, per usual, and figuring that the central banks will step in any day now and resume the rally into the stratosphere.
One thing I seem to be noticing with quite a bit of those who I'd characterize as "millennials" is strange sense of optimism about the market and economy. I believe there been conditioned to a 2009-forward environment and think this is the norm of how things work. Myself been through 2000 (not explicitly trading during that time though) and 2008, am not a millennial, and consider myself to have a pretty active bullshit detector.
Great points. That's what I consider all of the "conditioning" that takes place that makes even the most hardened cynics and skeptics re-consider their negativity and almost believe "hey, it's different this time". It's also why having CB's actively speculate and manage market levels obscene...If risk is suppressed long enough, then the unwinding is magnitudes more violent and chaotic. Just an example, I heard mentioned that this past week was the largest percentage change in VIX ever...(hard to believe, but it started at what 12.50 or so?), and why was that? Because no downside could last more than a few days before it was gunned back near all-time highs while the fundamentals deteriorated, emerging economies were in the tank and everything in the world screamed sell (except for the managed "levels" of the major indicies)...
Indeed! So coupled with this artificial CB meddling (which builds up a coiled spring), you've got a whole new round of investors added to the mix who haven't had their own portfolio head through a meltdown yet. These doe-eyed types aren't exactly hardened seafarers if you will and I seriously doubt they've got a strong uncle point. Could be a classic music stops circa March 2000 type environment but I just can't trust that the government won't pull out the stops to start screwing with any downturn. Their reputation has been artificially connected to the stock market (they helped with that!) and a 30% selloff probably isn't going to sit too well with them.
Markets in turmoil: Watch CNBC special report Cramer must be taking HUGE losses: He cannot stop chattering this morning! ...its just non stop... way more than usual.
cnbc is doing another special tonight at 7pm Gotta love it....ahhh been waiting years for this and its finally happening....cnbc now trying to calm the markets by doing these pathetic specials.... GO CNBC Special Market meltdown Live 7 PM ET