From goldminingoutlook.com
AND THE PEOPLE BOWED AND PRAYED TO THE NEON GOD THEY MADE (Simon and Garfinkel, "Sound of Silence"): The P/E ratio on the S&P 500 rose 0.16 to 35.09. On Thursday, May 13, 1999, the P/E ratio on the S&P 500 touched a new all-time high of 36.49 before closing up 0.10 at 36.27. For comparison with a bear market nadir, this value averaged 5.9 in the second quarter of 1949, and 5.7 at the very bottom that year. By almost any measure, including the ratios of price to book, total market capitalization to GDP, and dividend yield to bond yield, the last time any equity market was so overvalued was in London in 1720. Some London 1720 benchmarks have already been overtaken in recent months, leaving the 1637 Holland tulipmania as the only historic extreme not yet exceeded. Future generations will look back in complete amazement (and anger, if they're stuck with the paper). |
