how stupid are you?

Why is it stocks earnings can be so good, the economy be so invincible but yet stock prices be so weak. Bulls must be tearing there hair out….

As we all know hindsight is a wonderful thing, if only, but if that didn’t happen……. So why don’t you use some hindsight and ask yourself where the 2 most stupidest points would have been to buy shares. Clearly these points would have had to be 1929 and 1987. In hindsight you would never look at the market let alone touch it at these times.

So lets have a look at PE Ratios in 1929 they got to about 20 and in 1987 to about 22. With the recent run in EPS the PE Ration of the S&P 500 is 18.91, chart is as follows:


Chart courtesy of Decision Point


Chart courtesy of Decision Point

So before you drabble on about the big bull market to come, just think your buying at a 1929, 1987 top.

May also explain why the markets are not responding to good EPS figures to.