I don't know if we will see the sort of levels indicated by the "red line" or not but one thing is for sure PE's will have to come back considerably given the lack of investor confidence that has now invaded the market.
IMHO sustainable PE's will be the determining factor of what will be determined good value in the future in other words that old chestnut "fundamentals" will become the investors friend as it was in years gone by and that is the reason our market has not suffered the same degree of pain, our average PE is about 15 but even that may prove to be to high in the current climate.
Personally I don't think the pain is over in the US or here for that matter but some companies with good track records and reasonable PE's are starting to look attractive for the longer term investor regardless of the near term future SP, bottom picking is way to hard so nows the time time to start sniffing them out IMHO.
Whats your favourite, please quote current PE and historic didvidend yield.
