The stock market is way over priced if you use the price-earnings ratio (P/E) of the S&P 500 as a gauge. The dramatic rise in the S&P 500 since the market bottom in March (up 60%) has not been accompanied by or driven by an increase in earnings. Indeed, if you understand P/E as investors' anticipation of higher prices, you would think a super bull market is just around the corner. On the other hand, it can also mean a price bubble driven by speculation that can burst in any moment. Do you really think a super-bull market is coming? Follow me on Twitter
Stock Market P/E Skyrockets originally appeared on About.com Stocks on Monday, November 16th, 2009 at 22:42:48. Permalink | Comment | Email this |
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