RE: "Can this market break the old 130% of GDP record set by Japan back in 89? I estimate this to be around 10,200 on the DOW."
Excellent point. I've been struggling to find a "measuring stick" to compare the Japanese market in the 80's to the U.S. market today. If I remember correctly, the P/E's in Japan in the 80's were much higher than the current U.S. P/E's. (Weren't the Japanese P/E's in the range of 50 to 60?) Because of this, I decided that the P/E ratio is probably not a good "measuring stick" to compare present day U.S. with 1980's Japan.
Your "130% of GDP" gauge passes my "feels-right" test. I believe the U.S. market is in a period very similar to Japan in the late 80's. I also believe that, in the future, we will go through a period very similar to the Japanese 1990's. The question is when?
As you've probably figured out by reading my posts, I've been quite bullish for some time now. As a matter of fact, I am presently quite heavily overweighted in equities. At the beginning of the year, I projected a high of 8,450. It now seems that that projection may have been too low. Only time will tell.
Given my belief that we may be approaching a blowoff top, I'd be very interested in hearing how you correlate 10,200 on the DOW with the Japanese peak at 130% of GDP.
Thank you very much,
I2 |
