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Reset of Price/Multiple metric officially happened yesterday in Market
godawgst
Member, Swaye's Wigwam Posts: 2,525 
For 80 years the P/E of most stocks runs somewhere between 15-20 (some elite high growers higher, some poorer/industry specific ones lower)
Last 5-7 years it's been in the mid 20's and many well known companies have been closer to 30.
Costco yesterday perfect example. They are the best retailer in the US, got whacked Wednesday, and still are trading at 30 times earnings, when industry wide, the average PE would be closer to 12.5
The Price of stocks are being recalculated down which is shrinking the ratio back to normal.
Assuming the earnings start to follow suit which I don't see how this doesn't happen w/ inflation running very caliente and mortgage rates going higher taking 50% of home buyers out of the market piercing the Housing bubble.
So there's another shoe to follow, and the 1st one hasn't even stop falling yet.
#armchaireconomist
Last 5-7 years it's been in the mid 20's and many well known companies have been closer to 30.
Costco yesterday perfect example. They are the best retailer in the US, got whacked Wednesday, and still are trading at 30 times earnings, when industry wide, the average PE would be closer to 12.5
The Price of stocks are being recalculated down which is shrinking the ratio back to normal.
Assuming the earnings start to follow suit which I don't see how this doesn't happen w/ inflation running very caliente and mortgage rates going higher taking 50% of home buyers out of the market piercing the Housing bubble.
So there's another shoe to follow, and the 1st one hasn't even stop falling yet.
#armchaireconomist