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S&P 500 PE History

|Includes: SPDR S&P 500 Trust ETF (SPY)

I have heard commentators say that low PE values indicate that stocks are extremely undervalued.  Looking at this graph from we can see that the history these statements refer to starts in the 1990s.  The current PE for the S&P 500, while at the low point of the last 16 years, is in the upper quartile of the range from 1900-1990.

Will someone argue that the 1990-2011 represents a New Normal for stocks?  Or will someone else call 1990-2011 the top of a stock bubble?