pelican

Watch This Sector During the Upcoming Bear Market Rally

"Going back to 1881, the four times that the P/E ratio of the S&P 500 rose above 20, it eventually turned around and didn’t stop falling until it hit single digits. The average of those four trough valuations was 6.4."

I'm not sure four is a big enough sample size. I may flip a coin four times and it may come up heads each time. Also, I'm not sure what the time frames are here. The P/E fell from above 20 in the past to single digits but does that mean the market was lower? If earnings grew 10% annually, then you could have had a 20 p/e market become a less than 10 p/e/ market in eight years with no change in price. Just food for thought.