<<this PE ratio issue>>
Well, to be fair to us bears, it's a P/E, P/CashFlow, P/Div, P/Sales, P/Book, and P/GDP issue. Some reasonably up-to-date long-term charts...
contraryinvestor.com
contraryinvestor.com
contraryinvestor.com
contraryinvestor.com
contraryinvestor.com
contraryinvestor.com
Obviously, historically-anomalous high P is the common factor here.
These anomalies are huge, and can only be justified by a correspondingly huge economic shift since 1995.
Personally, I do not believe that there has been any economic change since 1995 large enough to justify these unprecedented departures from historic norms. Nothing which dwarfs electrification, the automobile, victory in WW2, telephone communication, or the first 45 years of the computer and electronic age which occurred before 1995.
Productivity is the argument of the day, since Greenspan brought it up. But recent-years productivity numbers (in final revision) are NOT unusually large compared to the whole post-war period. Certainly not higher than in the 60's. They only seem great compared to the 80's and other relatively slow periods.
I'm assuming you disagree with some step in this chain of reasoning. Plz explain. PM me if you want... if I'm wrong I'm gonna lose money, so you'd do me a favor by swaying me back from the dark side. |
