"This is starting to remind me of the 1972-1974 bear market."
But there are major differences too. The 1972-74 bear market resulted from very substantial defense expenditures and oil price increases causing a reduction in consumer spending. The oil price increases were much greater than those which occurred in the past two years. Furthermore, the impact of high oil prices on the economy was much greater than it is now. Adjusting current high oil prices for inflation makes them much lower, relatively speaking, than in the 1972-74 period. And of course, defense expenditures are much lower, adjusted for inflation.
If you look at NASDAQ price declines, you'll see something quite extraordinary. Overall, NASDAQ is down about 50 percent this year, and that is true even for highly favored stocks such as Intel and QUALCOMM, as well as high growth, smaller stocks such as SanDisk, where the drop is even more extreme. But if you factor out the relatively new additions to NASDAQ which haven't had any earnings at all, and include only those companies with at least two consecutive years of earnings, what you get is a group of stocks that is selling at a very modest price-earnings ratio of about 30.
Put another way, the profitable component stocks in NASDAQ do not appear overpriced at all--underpriced if anything. It's the perception that the whole group, including losers as well as winners, is too high that creates the problem. This is different from 1972-74, when overall price-earnings ratios were admittedly quite low, but so was overall earnings growth.
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