Ghost of Igloi wrote:
agip wrote:
well Igy come on
we're in an obvious earning gulch here, during a pandemic,
and consensus has a historically strong economic growth number starting in 6 months.
You can poo-poo estimates but do you really think the end of the pandemic and trillions more of dollars won't juice the economy? really?
A forward PE of 22 when you expect the economy to grow 6% with near zero interest rates...is not all that exuberant, frankly.
No different really than expalining away the $Trillions that made valuations seem like they don't matter. It is pretty clear there is a laundry list of factors that do not justify where the market is, or projections for 2021 or 2022. If someone believes differently fine, but the facts are this is one of the most expensive markets in history, period.
do you remember a few years ago when oil cratered and since the earnings of energy companies in the SP500 went bigtime negative? You argued that the market was very expensive. Sure, it was, because the energy sector lost billions and billions. the PE skyrocketed because earnings dropped a lot.
But the market made a judgment that the SP500 earnings drop was temporary, so it lookd over the earnings valley to when oil prices rose and restored SP500 earnings. The market disregarded a temporary valuation spike.
That's the same thing has now. The pandemic cratered earnings, but it's clear that those earnigns will be restored end of the year and onwards. So we have a moderately elevated PE. Not dangerous in this context.