It's my understanding the S&P is valued at 50 times earnings... a realistic/profitable number is 15 times earnings....
If you are talking about the 12 month trailing P/E of the S&P 500 index, WSJ has it at 18.12 as of 4/6/23, down from 25.57 a year ago.
https://www.wsj.com/market-data/stocks/peyieldsAnother source put it at 21.94 as of 4/6/23. It also shows an index mean of 16 and a median of 14.93
https://www.multpl.com/s-p-500-pe-ratioIt’s still high but coming back down to earth. I think that is because interest rates give people better risk-free alternatives to park their cash and because cash-burning growth companies that need to borrow money at higher rates are much riskier now. Companies that supply stuff that people need are still going to be fine.
Well said.
Looking into the details, however, reveals the interesting stuff.
https://www.yardeni.com/pub/stockmktperatio.pdfLooking at the P/E's, the large cap (think flight to safety) is still fairly lofty both in real and historical terms. Not nutzo anymore, but still pretty pricey in a 5% inflation environment.
S&P Small cap P/E's are a different story (think flight from risk) and have really cratered over the last year or so, pretty much cut in half to well under 15. The notable part is that the S&P small caps have significantly lower P/E's than their Russel 2000 counterparts/..
