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IPFS News Link • Economy - Economics USA

Equity Valuations, an Everything Bubble and "Policy Trumpacho"

• https://mishtalk.com, by Mish

This is a guest post by Jason Leach with minor editing and a few new subtitles.

There has been much talk on the TV these last few months: (i) how valuations don't matter(ii) how it is about sector rotationand (iii) how making America great again is going to unleash financials, industrials, materials, energy, etc.

I've read fundamental and technical research and attended conferences with virtually no mention of potential downside. How could there be when everything is "breaking out" (healthcare be danged) and a cursory glance at the omniscientforward multiple on the S&P 500 is barely above the historical 16.5x mean, at a warm porridge just right 18x.

Furthermore, it is argued, that since we have moved from dirty to digital, from smokestacks to server racks, margins have expanded and rendered useless any historical comparison of today's valuation multiples to the 1980s or aghast, the dirty 1960s-1970s – pre-steroid era…pre-concussion protocol…hide yo kids, hide yo wife…they're canceling CFA Level II study courses around here…


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