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A Bit Tipsy.


For readers following the recent ‘valuation’ theme, here are two very uncomfortable reads from economist.com. (with Thanks to ‘diversifyme’).

the same Q ratio that showed the dotcom bubble in 2000 now shows the US market is 85% too high.’

as you can see, the {P/E} ratio is close to one of its 20th century peaks in the mid-1960s, which preceded the long bear market of the 1970s‘.

… file under the category of ‘not what investors want to hear’.

Shiller's PE 2011 economist.com

 

 
 
 
 
 
 
 
 
 
 
 
Next time?
Incentive drives behaviour.
Doug Cronk CFA is Manager, Investments for a Canadian Pension Plan
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One Comment Post a comment
  1. diversifyme #

    I really, really encourage everyone to take a look at this slide presentation on the state of the US economy by Jeff Gundlach, a (far as I can tell) pretty well respected bond manager. June 2010, but still highly relevant today I suspect. Fascinating (and sobering) stuff:

    http://www.businessinsider.com/jeff-gundlach-doubleline-2010-12#the-us-debt-situation-is-not-looking-good-1

    This is his current assessment of things as well:

    http://www.businessinsider.com/jeff-gundlach-presentation-2011-4#-1

    Cheers,
    Sean G.

    Like

    May 24, 2011

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