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Stocks are richly valued, but have at times been pricier.
Low bond yields "explain" but don't "excuse" high multiples.
High valuations might imply blah long-term returns, but say nothing about how the market might do this year or next.
Weekend column. http://cnb.cx/3qIhNfS
Low bond yields "explain" but don't "excuse" high multiples.
High valuations might imply blah long-term returns, but say nothing about how the market might do this year or next.
Weekend column. http://cnb.cx/3qIhNfS
Not noted in the piece:
Relative to the very long-term average, stocks have looked "expensive' far more often than not since 1990. The past 30 years have had longer cycles, lower trading costs, more resilient corporate profitability, deeper credit markets, a more activist Fed...
Relative to the very long-term average, stocks have looked "expensive' far more often than not since 1990. The past 30 years have had longer cycles, lower trading costs, more resilient corporate profitability, deeper credit markets, a more activist Fed...
...There's always a chance forward earnings, especially in 2021, could be better than now forecast. Usually, analysts' year-ahead estimates are too high, but coming out of a profit downturn they can underestimate the snapback. This was the case in 2010 coming off the '09 bottom.
