That’s Only 170 points from here….have no fear!
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he has been silly about S&P valuations for a long time. by many a metric, price/book, p/e, etc its cheap as hades at 950.
remember these facts:
1. the dividend yield of the S&P is not useful for valuing. why? in 1980 share buybacks were order of magnitude or more less than dividends. today they are 50% larger. So you have to multiply the yield by something like 2-2.5 to get an equivalent 1980 dividend yield.
2. accounting changes have shifted reported earnings down a great deal. Until about 10 years ago they tracked operating cash flow very closely, they are substantially lower now. So reported earnings in the aggregate are less than they were in 1977. I can find a link to that if need be.
3. book value is understated as tech companies and biotech firms R&D and knowledge isn’t accounted for. I can provide a link to that if need be.