The average P/E ratio of the S&P500 companies is now around 48. This only for the companies with positive earnings. If we consider the companies with negative earnings, the P/E would be stratospheric.
Take a look at the historical evolution of the average P/E ratio showing the huge jumps since the great reflation of 2009:
August 4: 47.50
July 25: 49.02
July 7: 42.00
June 25: 43.23
May 23: 40.99
April 21: 16.44
April 15: 16.21
Current earnings do not justify the current prices. It is amazing that this market still goes up. Buyer beware!
I am tracking these prices at http://nexalogic.com/sp500.html. P/Es are those reported by Google.
Wednesday, August 5, 2009
Posted by The Shocked Investor at 8:50 AM
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