Greg,
The article is the same old stuff from the same old talking heads printed over and over again. They just don't get it.
When my wife and I got married, almost 25 years ago, we bought our first new car, a Toyota Corolla, for $3,900.00. The car now sells for what, maybe $12,000.00? An increase of 300% over the 25 years or about 12% per year. I don't think wages have increased at that level over that last 25 years. It takes a greater percentage of an individuals income now to afford the same car than it did back then. It's value has changed. With money flowing into the market from folks like me, who won't put money into a savings account to save for my retirement, stock valuations are going to change, just like they did for the car. The market is pushing them upward.
I could go to a Toyota dealer and insist that the value of the Corolla is completely out of line, and that is should really cost maybe $7,000.00, and they should give it to me for that price. After they stopped laughing, they'd tell me to quit wasting their time. The analysts in Barron's are just like a person who would try that type of stunt. They want all stocks to have a PE of 20-25, or lower. When they can't get them for that, they start talking about the over valued market, stocks crashing, end of the bull run etc.
Just like the car dealer, every time I read about valuations, I start laughing. Those boys need to get a clue. They are changing and they could go higher. Maybe at some point that fact will sink in and they'll start rethinking what they put in print. |
