Very interesting article on Casey research sensible. Here is link http://www.caseyresearch.com/cdd/the-perfect-investment-for-when-everything-is-expensive From a pure mathematical accounting approach I think many people don't relise that the reason EARNINGS are high is SIMPLY because INTEREST RATES are so... LOW. Virtually all big companies borrow cash and have paid it back as dividends over the past 25 years. They pay interest on the borrowings so if interest rates increase (and they will) the earnings will plummet since it directly affects the profit top line. This means the B/E will go sky high or the share will plummet. This is the reason why the "Schiller" P/E based over 10 years is the realistic number to use. As you can see from this article it is the HIGHEST since the great depression of 1930. When interest rates rise the pack of card comes crumbling down and the sea goes out and we see who isn't wearing bathers!
