Stock Market Watch – Who’s drinking the Kool-aid?

Posted by Jason | Posted in Economics | Posted on 10-11-2009

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While doing some research, I decided to look and see what the S&P 500 was trading at. The average P/E ratio from 1961 through 2008 was 17.79 The height of the dot com bubble reached 35.5. As you can see the current P/E ratio of the S&P 500 is almost 140. You can confirm this on Standard and Poors website. As of this posting, the S&P is trading at 137.98 times earnings. While I’m sure that will come down as companies earnings pick back up, the market appears to be looking for some historical gains in earnings. As I said even in the dot com bubble we were only 25% of where we are currently trading.

While I’m not professional, this sure seems like a lot of people are drinking the economic recovery Kool-aid. I better head over to TradeKing and sell my index fund before the Kool-aid runs out.

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Comments (3)

Smart man, sell and buy silver bullion (physical silver, not paper confetti)

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