The tolerance for bad behavior is high. Look at politicians trading on insider information. These things are revealed after the damage.
Well, I absolutely support some of the recent efforts to institute a ban on members of congress and their family members holding/trading individual stocks.
The tolerance for bad behavior is high. Look at politicians trading on insider information. These things are revealed after the damage.
Well, I absolutely support some of the recent efforts to institute a ban on members of congress and their family members holding/trading individual stocks.
Pretty clear that our Country has been mismanaged, where getting your share for many is built on lying and deceiving. I could make a laundry list of ills. But it starts with the incestuous relationship between the Fed, Treasury, and Congress. The foundation of fake markets.
Yours is the all too common excuse. CNBC uses non-GAAP exclusively when reporting EPS, as well as highlighting the same by companies. Why? it makes the growth of trees to the sky more plausible. While the average investor does not know the difference. All the stuff quoted in the previous post are business expenses.
I see it as the zeitgeist of this era. Anything goes. Everyone wants their cut.
Bubbles are generated when investors drive valuations higher without simultaneously adjusting expectations for future returns lower. In other words, the defining feature of a bubble is inconsistency between expected returns b...
The S&P 100 now has 27.2% of its total value in stocks that have a P/E of at least 50. There is only one company that has a P/E below 10. pic.twitter.com/OMag3aFzzv
While I agree the market is very overvalued, I think this specific metric isn't nearly as relevant as it was 40 years ago. The US economy has become much more international than it was back then, and more and more people from all over the world have put their money into the US stock market, so it only makes sense that it would outpace our own nation's GDP.
That being said, I am not buying right now. Have had some expenses come up anyway, so it's a good time for me to put money into life stuff anyway, but even if I had money, I don't think I'd be buying anything right now. Shiller PE ratio is currently the second highest it's ever been with the record being set during the dot com bubble. Given we saw a 20% pullback in 2022 when it was this high, seems quite foolish to be optimistic for growth right now.
Yours is the all too common excuse. CNBC uses non-GAAP exclusively when reporting EPS, as well as highlighting the same by companies. Why? it makes the growth of trees to the sky more plausible. While the average investor does not know the difference. All the stuff quoted in the previous post are business expenses.
I see it as the zeitgeist of this era. Anything goes. Everyone wants their cut.
While I agree the market is very overvalued, I think this specific metric isn't nearly as relevant as it was 40 years ago. The US economy has become much more international than it was back then, and more and more people from all over the world have put their money into the US stock market, so it only makes sense that it would outpace our own nation's GDP.
That being said, I am not buying right now. Have had some expenses come up anyway, so it's a good time for me to put money into life stuff anyway, but even if I had money, I don't think I'd be buying anything right now. Shiller PE ratio is currently the second highest it's ever been with the record being set during the dot com bubble. Given we saw a 20% pullback in 2022 when it was this high, seems quite foolish to be optimistic for growth right now.
If valuations never matter again many will never own a house. Inevitably valuations do matter. Regarding U.S. centric investments I am skeptical for a variety of reasons. A fake market addicted to cheap and plentiful liquidity would be just one. Another would be aging Baby Boomers influencing a variety of future spending. Can you imagine the glut of housing and apartment inventory? Today there are more houses on the market than any period since the Housing Crisis. I would much rather own international, and have done well with most of my money in EM bond CEFs.
This post was edited 7 minutes after it was posted.
This is interesting. Yes, these companies are overvalued, BUT, they are also very strong companies, right? What would it take for people to actually care about what the PE ratios "should" be? It seems like people generally only really start caring about that when a company runs into trouble. Not sure that's likely for most of these countries any time soon...
Regardless, seems foolish to buy any Mag 7 et al stocks if you're planning on holding for the long term.
This is interesting. Yes, these companies are overvalued, BUT, they are also very strong companies, right? What would it take for people to actually care about what the PE ratios "should" be? It seems like people generally only really start caring about that when a company runs into trouble. Not sure that's likely for most of these countries any time soon...
Regardless, seems foolish to buy any Mag 7 et al stocks if you're planning on holding for the long term.
The only way high PE stocks are sustanable is through a Government subsidy of low taxes and cheap plentiful liquidity. Both are at risk, one thru deficits and inflation. The other thru rising interest rates andthe realization the money can’t be paid back. More of this:
We have been told that if the central bank cuts are not “too late,” long term rates fall, including mortgage rates.
It did not happen in the US a year ago when the Fed cut and it’s not happening now in the UK (or throughout Europe).
This is the average of four long-term valuation measures for the S&P 500 compared to the geometric mean of each:
1. The Crestmont Research P/E ratio 2. The cyclical P/E ratio using the trailing 10-year earnings as the divisor 3. The Q ratio, which is the total price of the… pic.twitter.com/zjoJrPuRmC
The S&P 500 trailing P/E ratio in March 2000 was 28.3. As of August 16, 2025, it's 29.9—slightly higher, indicating elevated valuations similar to the dot-com peak.
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