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« The Porn IPO | Main | The SI Swimsuit Indicator » February 12, 2008 The S&P 500 and Its EarningsHere's a look at the S&P 500:
The chart follows a logarithmic scale. (If I were smarter, I'd know how to make a logarithmic chart in Excel where I could zoom in on my high and low points. Since I can't, this will have to do.) The black line is the S&P 500 and it follows the left scale. The blue line is earnings and it follows the right scale. Where the lines intersect is a P/E ratio of 15.85 (which is 10^1.2). In my opinion, this really wasn't a valuation bubble where valuations overshot prices. Instead, the fundamentals tumbled beneath prices. Posted by edelfenbein at February 12, 2008 1:15 PM |
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