Ray Lopez

Are International Equities Out of the Woods Yet?

Another poorly done stats piece: "I don’t know that I will be jumping on board anytime soon, but Citigroup (C) notes that at 10.3 times trailing earnings, world-wide stock valuations have tanked to levels worse than that of an 11.4 average for the 1970s.

To an extent, forward P/E ratios have lost some of their predictive value. After we have seen a slew of downward revisions by companies reporting their third-quarter earnings, these ratios have become moving targets."


Duh! Are we talking about the 1970s early, or late? Today's trailing earnings were recorded before the crash, so they are meaningless. Just like the "Nifty Fifty" had great, low PEs just after the early 1970s crash, if you used old earnings.