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TOPIC: Question on stock prices.
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Created by:
az_couple_69
Original Starting post for this thread: |
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So, historical norm on stock prices was the S&P 500 P/E ran about 20 minus bond interest rates. Interest rates at 7%, stocks averaged 13 P/E. 13% late 70s, stocs were at 7P/E. As interest rates slowly fell throughout the Reaganomics era as needed to increase debt 3x the sustainable rate, by mid-90s, stock P/E's rose to 15-ish as interest rates fell to 5% ish.
Little bubble up to 30-35ish peak of the tech bubble in 1999... but pop. Back to 15-20 range for the housing bubble... 2008-2010, kind of went undefined divide by 0 as there were no profits and S&P bottomed at 735ish. But, profits soon came back and P/E settled back in the 15-20 range for Obama's second term, which makes sense what with 2% interest rates. Trump era we got "multiple expansion" up to P/E of 25. That is, most of the stock gains were totally disconnected from actual profit per share... almost like a bubble. So, the, 30-35% "crash" in stock prices we have seen so far, have put us "all the way down" to historical normal P/E of 18 seen in average "good times".... based on 12 month trailing profits. 2008, triggered by 10% of mortgages going into default, bottomed at 735, which inflation adjusted is about 900 today. Instead, we're still at like 2200. Sorry, that was yesterday. Closer to 2400 today. So, the question is, "Da fuck?" How are we not at 1000, with stock traders jumping out of windows right now? Denial?
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Glendale AZ US
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Sacramento CA US
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Glendale AZ US
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Glendale AZ US
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Glendale AZ US
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Glendale AZ US
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Glendale AZ US
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Lutz FL US
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TOPIC: Question on stock prices.
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