After each of the previous periods with poor economic performance, the P-E ratio had to get down into the neighborhood of 10 for an extended period of time before rapid economic growth resumed. I sure hope that's not the case this time or we have a long, long ways to go before growth resumes.
Wednesday, November 23, 2011
Price to Earnings Ratio
I happened to see the following chart of the Price to Earnings ratio of the S&P 500 and thought it was interesting (click on it to enlarge):
After each of the previous periods with poor economic performance, the P-E ratio had to get down into the neighborhood of 10 for an extended period of time before rapid economic growth resumed. I sure hope that's not the case this time or we have a long, long ways to go before growth resumes.
After each of the previous periods with poor economic performance, the P-E ratio had to get down into the neighborhood of 10 for an extended period of time before rapid economic growth resumed. I sure hope that's not the case this time or we have a long, long ways to go before growth resumes.
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I sure hope that's not the case this time or we have a long, long ways to go before growth resumes.
That's because you aren't seeing the hockey stick in the data.
Perhaps if you squinted harder.
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