another bubble run, page-115

this may be interesting for mreinke, an article which touches on P/E levels for some recent major market tops like in the US in 2000 and Australia in 1987.

http://www.theage.com.au/news/business/history-shows-theres-a-long-way-to-go/2007/04/27/1177459980761.html

Worth a read. I also think it is pointless to discuss P/E's without paying any consideration to inflation and interest rates. clearly most people will pay a higher P/E for a stock if interest rates are around 6% and inflation about 3%, compared to an environment if interest rates and inflation were twice these figures.

I am not sure where anyone can get confidence that we are near a market top just because the market is reasonably expensive. I thought the recent bull market in the US was a classic example around 2000 where P/E's were above 30. Is there any reason why this could not occur with our market? Quite unlikely I would think, but our P/E's expanding to say above 20 and perhaps closer to 25, is a scenario that has quite a realistic probability I would think.