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Jim O’Neil of $GS: U.S. Stocks are Not Cheap

 

“With the various market indices pressing near all-time highs, this might seem obvious, but this is a key point from Goldman Sachs Asset Management chairman Jim O’Neill regarding market valuations.

This is from his latest Viewpoints letter.

…I would also like to mention, is according to one of the more cautious valuation techniques I have learnt to follow, so called CAPE (Cyclically Adjusted Price Earnings), the US market is certainly not cheap today, and neither are Australia nor Mexico (see table below). Such a cautious approach does not mean these or any markets will stop rallying but it is a sign to be careful and that these markets could be especially vulnerable to disappointing and surprising news….”

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