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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Elroy Jetson who wrote (43250)10/11/2005 1:02:34 PM
From: Wyätt Gwyön  Read Replies (1) of 110194
 
the other part of my message which got cut off, is the high sector weighting which is indicative of a bubble. energy stocks were 30% of SPX in 1980, vs 9-10% today. tech stocks were 25-30% of SPX at bubble peak in 2000, now 16-17% on their way to single digits imo.
if you think 8x PE is too expensive today, try the rest of the market which is way higher, many stocks on fake pro forma earnings. also you need to remember that PEs for ALL stocks were much lower back then. PEs about half of current levels (i believe the all-time low was in 1974 at 7x PE for the entire market), due to the competition from high interest rates as well as the bubble in real assets. the stock market was not where most people put their money back then, unlike the 1990s and to a lesser extent today.
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