“Corporate profits that doubled since 2009 have left the Standard & Poor’s 500 Index cheaperthan at all 34 peaks since 1989, even as options traders push the cost of protecting against losses to the highest in four years.
Companies in the benchmark gauge of U.S. stocks trade for 14.1 times earnings after advancing 102 percent since March 2009 to an almost four-year high last week, data compiled by Bloomberg show. Valuations are lower than at every 52-week peak since 1989. Traders have pushed the price of contracts that pay should the S&P 500 drop 20 percent to the most since 2007 compared with ones betting on a rally of the same size….”
If you enjoy the content at iBankCoin, please follow us on Twitter
I don’t see why people compare to peaks. 1929 for example was obviously in hindsight not a rational level, so what does it mean being down 10% or 20% from a peak that was overvalued? Why not measure from the avg middle 50% spent between a trough and a peak that stocks spend the majority of their time in?
good point; but some one has to pump things up. i mean you need buyers when you want to unload…no?