Why is no one talking about the S&P500 P/E ratio?

Discussion in 'Trading' started by MrDODGE, Aug 12, 2009.

  1. You know the one I am talking about. The one that calculates the valuation of the S&P500.

    Does this seem normal to anyone?

    <img src='http://www.bullandbearwise.com/SPEarnings.asp'>
    * When this chart gets updated it will be well over 140

    By the way, the P/E ratio has NEVER been this high. How in the heck are earnings going to catch up to these crazy valuations?
  2. The emperor has no clothes.
  3. Nobody is talking about the ratios because cnbc and the media is in full hype mood to get even more people sucked into his trap. This is the most irrational rally of all time due to it being almost impossible for earnings to snap back huge to justify prices due to 10% umemployment and trillions of $ of credit being gone forever.at least in 1999 earnings were skying and one could dream.how can jpm be worth more than in 2007when the dow was 14k and business booming? also until the last few days there was no coverage about any concern with the mkt being up 50% in 5 months
  4. Real unemployment rate is 19%.

    Economy blows.

    If media and gov't don't successfully spin "everything is fine" line to get people to keep buying shit, we'll be in immediate death spiral. Money will stop circulating, and panic will ensue.

    It's inevitable, anyways. It's just a matter of how long they can keep the charade going for.

    Sorry to sound so glib, but technical and more detailed explanations get exhausting after a while.
  5. ess1096


    Greenspan, December 5, 1996:

    “ [...] But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade? [...] ”

    True then, true again now.

  6. piezoe


    Earning will escalate considerably in coming years because of outsize inflation. One explanation is that the market is just discounting the expected inflation which is the primary driver of both earnings and stock prices.. These numbers are of little interest to short term traders.

    Nevertheless the numbers seem a little out of whack and suggest an eventual correction may be in store. Perhaps price manipulation and hype are more effective now than they were in the twentieth century. I wonder, does anyone know what the P/E ratio in the Argentine market looked like before they defaulted and ran out of paper to print money on?

    When Wall Street wants to ignore reality they will claim there is a new paradigm operating and the old measures of market values no longer hold. Expect to hear stories like that coming from the Wall Street shills. Does anyone remember "the new economy" of the tech and internet bubble?
  7. Neoripley


    It's being engineered. We're in a synthesized market.
  8. Rampant inflation with wage stagnation or deflation and high unemployment is not going to boost earnings.

    Sorry. Never will happen.

    Just the opposite.
  9. piezoe


    Remember, By Lo. business hates full employment. America was built on cheap labor! There will be employment, eventually, it just won't be at a living wage.
    #10     Aug 12, 2009