Market P/E ?

[fluffy]

How do you find out the "true" market or index P/E ?

For example, Yahoo Finance currently shows the following:
iShares S&P 500 Index (IVV): 13.62 P/E
SPDRs (SPY): 14.28 P/E
Vanguard Large Cap ETF (VV): 15.82 P/E
To add to confusion, going by ETF's providers websites:
iShares S&P 500 Index (IVV): 20.63 P/E (source: iShares.com)
Vanguard Large Cap ETF (VV): 16.5 P/E (source: Vanguard.com)
all as of 1/31/2008 (ssgafunds.com doesn't list P/E for SPY, other than 13.73 FY1 P/E). How do you reconcile all this? These are all supposed to be more or less equivalent funds.

It's even worse with Small Caps. Yahoo shows IWM at 14.96 P/E and VB at 17.29 P/E. iShares shows IWM at 25.47 P/E while Vanguard.com shows VB at 20.7 P/E, both as of 1/31/2008.

I know I'm supposed to stick to my AA and not worry about anything else, but come on!

 

[lswswein]

For "random" indices comparing the P/e ratios is hard. Not all Value Indices have the same benchmark index. So they have different stocks in them. What you should be looking for is the P/E ratio reported by the benchmark guys. MSCI is a good place to start. Also S&P publishes the P/E ratios for their indices on their website - how your mutual fund tracks the index is a different story.

does that make sense?
-h

 

[twaddle]

Ah, but what is the "true" P/E, grasshopper?

Trailing earnings? Forward earnings estimates? Operating earnings? GAAP earnings? Normalized earnings over the entire business cycle?

 

[fluffy]

Thanks for the replies. I know there's no one "true" P/E but I guess I expected all sources to use the same TTM data resulting in very similar values for what are essentially equivalent funds.

Using "official" index data makes sense. S&P shows 12/31/2007 P/E of 18.68 for S&P 500( http://www2.standardandpoors.com/spf/xls/index/sp500pe_ratio.xls ). I couldn't find P/E info on MSCI site -- where should I be looking? Thanks again.

 

[clifp]

Interesting stuff Fluffy. I am surprised that the fund providers and yahoo have different numbers. I agree with you it is hard to make judgements about the relative prices of the market when no two numbers seem to agree.