As market turbulence reaches maddening levels, I wanted to show you this. It’s something you don’t usually see near a stock market low…
Based on price-earnings (PE) values, the S&P 500 Index is now trading at the loftiest level of its 95-year history. (Although the actual S&P 500 did not emerge until 1957, its 90-stock predecessor launched in 1926.) The S&P’s current PE of 31 tops its 2000 peak reading by a nose.
Stock market valuations appear even more stretched from the perspective of other common metrics like the price-to-sales ratio, price-to-EBITDA ratio, and the “Buffett Indicator.”
On average, these valuation gauges place the S&P 500’s current pricing about 50% higher than its 2000 peak.
The Buffett Indicator, for example, shows the S&P’s valuation to be hitting all-time record highs that are 56% above the previous record highs of the 1999–2000 dot.com bubble.