Crashy.......that is subject to opinion!! 1987 wasn't looking at...

Crashy.......that is subject to opinion!! 1987 wasn't looking at a prospective PER of around 17 for the SP either!! And again.....don't forget interest rates. I must admit I was swapping a bit from the US to our market and made a point of emphasising our market there . In any case I would maintain that bearing in mind the earnings rebound we have already seen this half the PE of the SP is in reality far lower than people who quote it on last years earnings (which for the states ended with the worst half in ages)would like to believe. Companies have already had a far better yoy first half overall and if you insist on forgetting that then the market can clearly be made to look worse than it really is. "Corporate profits with inventory valuation and capital consumption adjustments reached a seasonally adjusted annual rate of $827.8 billion in the first quarter, according to recently released data from the Commerce Department. That was $5.8 billion above the fourth quarter, and $130.8 billion above the previous period.

Even more important, the first quarter's earnings were $38 billion, or nearly 5 percent above 2001's first quarter. This marks the first time since the third quarter of 2000 that this measure of corporate profits rose in year-over-year terms."

I would still maintain that the market (currently) in regards to the earnings that are currently being had is not as overvalued as 1987. If the market drops 50% from here then I'll eat my hat.

Hotcongo............yes I use a formula with a similar idea to what you suggest and it does show that at least our market is not overvalued at all.