whidbey

Crazy P/E Ratios

The PE on SP5 is historically around 15, but today about 22 as of 9/30, Trailing five years is higher yet ~28. Usually the market will over correct to something like 9 or 8 before the correction is run out. The falling prices today mean that earnings must fall substantially to reach the required, or traditional, under ratio of below 15. By these guidelines there is one hell of a lot of grief left to go. But I suspect a bear market rally will intervene before the next act of violence. Z