ItsJustMe

Stock Valuations On the Rise

I wasn't aware of this development until today when I read a CNBC blurb where Cramer mentioned that the last time PE's got this high, the Dow crashed 1500 points and he advised his listeners to cash in their gains and get out of the market.

It doesn't surprise me however. When you watch a company take a $19 billion loss and its stock skyrockets, you begin to wonder about people's embrace of reality.

Yes, investors are more concerned with PE's going forward than they are current PE's, but anyone who thinks the financials are going to have future earnings that will support a 19.07 PE ratio are in for a rude (and very costly) awakening.

Not only have the banks taken billions in losses already, but they have billions in losses yet to come with the country slipping into recession and even after the recession, their VERY profitable days of no-money-down and "liar loans" are over.

I hate to agree with Cramer, but...looking at those PE ratios tells me that when investors wake up, it's going to get ugly...