"IT'S THE VALUATIONS - STUPID `"
S&P today, is STILL in unprecedented BUBBLE territory...
From John Maudlin:
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S&P recently announced they intended to start
reporting earnings using new standard which dealt
with options and pension liabilities, in advance
of it being adopted by the accounting industry.
Yesterday they released their study of earnings
for the S&P 500 for the four quarters ending in
June, 2002. Instead of the $44.93 that Thomson
First Call reported, S&P said actual reported
earnings were $26.74 a share. . . .
Earnings are $26.74, that is, until S&P deducts
option expenses and pension liabilities from the
companies in their own index, and then earnings
drop to $18.48 a share.
This is a Price to Earnings (P/E) ratio of 48.6
on the S&P 500, as of the close today.
This is clearly still stock
market bubble territory, and is why a resumption
of a bull market is not in our near future.
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A "real" PE Ratio of 48.6 as of today... that was worth re-printing.
I guess perhaps DOW 5,000/S&P 500 may indeed be optimistic; as if we merely return to traditional and historically supported single digit PE's and high single digit dividends... then DOW 3,000 / S&P 300 is far, far from being the irrational ramblings of kooks & bunkered bears... it's merely the cold hard facts supported by history. |
