Mixed signals or confirming signals? There are four variables that can determine whether the current secular stock market cycle is in bull or bear territory: P/E, dividend yield, inflation rate, and bond yields. P/E is the pure measure of the stock market valuation level, especially when it is normalized for the business cycle. Dividend yield, … Continue reading Bull or Bear?
As the bull market began in August 1921, the S&P 500 price-to-earnings ratio was 14. In September 1926, three years before the 1929 peak, the market's p/e ratio was 10.72, even more subdued than in 1921. By the time that September 1929 arrived, the market's p/e ratio had jumped to 20.17. At the February high … Continue reading Sorry, stocks are more like they were in the year 2000 not 1921