I always use calendar, not fiscal, years, so that when I'm comparing different companies, it's apples-to-apples. I don't always remember to state that in my posts.
As far as whether we are (back) in a Bubble: the S&P 500 has been above the top end of it's very-LT PE range (10-20), almost continuously to the last 10 years. If you had gone to cash a decade ago, when the market PE hit 20, you'd still be waiting for reasonable non-bubble valuations. I am using 1999 as the only clearly Bubble year. I am using the 1994-1997 valuation areas as the area where I expect valuations to go to and stay. Especially since the recession seems (unexpectedly) to already be over, and the consumer never quit spending, I think it highly unlikely the market goes to valuations lower than what we saw in 10/01.
I can't justify it or explain why, but that's what investors are doing, and I'm not going to fight the trend. Lots of Bears just keep muttering, "it shouldn't be this way, PEs should be single-digit". I don't find that a useful stance. |
