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« New Sector Leaders Emerging? | Main | October 20th Blogger Sentiment Poll »

Comments

It would be very nice to see this chart adjusted for inflation. The period of very low P/E's in the '70 & '80s corresponds to a period of high inflation and therefore low real earnings yield and so results in higher real P/E's.

A series of real P/E's might show that the market is currently cheap compared to its historic average.

Anything less than Robert Shiller's data on PE ratios is a waste of time.

http://www.econ.yale.edu/~shiller/data/ie_data.xls
http://www.econ.yale.edu/~shiller/data/ie_data.htm

isn't price quoted in current dollars as well as earnings quoted in current dollar so that when you divide one by other they would cancel, thus making inflation irrelevant.

The reason that P/E is affected by inflation is that competing investments (bonds etc.) are returning higher rates. This depresses stock prices and thereby P/E ratios.

http://en.wikipedia.org/wiki/PE_ratio

You don't adjust PE ratios for inflation but inflation does affect what is an acceptable PE ratio. In periods of high inflation you can easily find high rates of returns elsewhere so stock prices drop, not being in great demand.

Seriously, L, please update this with new commentary now that the TMM index P/E is 145-ish.

Time to start investing in gold, ammo and canned goods?

That's TTM, of course.

Our story, it occurs only in youth that the most brilliant day.

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Blogger Sentiment

  • The Ticker Sense Blogger Sentiment Poll is a survey of the web's most prominent investment bloggers, asking "What is your outlook on the S&P 500 for the next 30 days?" Conducted on a weekly basis, the poll is sent to participants each Thursday, and the results are released on Ticker Sense each Monday. The goal of this poll is to gain a consensus view on the market from the top investment bloggers -- a community that continues to grow as a valued source of investment insight. © Copyright 2015 Ticker Sense Blogger Sentiment Poll

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