Early Retirement & Financial Independence Community - View Single Post - Chart of S&P 500 v. P/E (both ttm and ftm)

sgeeeee · 07-03-2005, 11:07 PM

Nice charts. I have looked at and analyzed this data before and it is one of the reasons why hold little stock (no pun intended) in arguments that we are facing a long period of poor performance based on current valuations. The correlation between valuation and future performance is weak at best. JWR looked at a lot of this data in the past and found better (but still weak) correlation between PE10 and future performance. He and ***** have tried to make way too much of the data, but it is still interesting.

07-03-2005, 11:07 PM	#13
sgeeeee Thinks s/he gets paid by the post Join Date: Feb 2003 Location: Mesa Posts: 3,588	Nice charts. I have looked at and analyzed this data before and it is one of the reasons why hold little stock (no pun intended) in arguments that we are facing a long period of poor performance based on current valuations. The correlation between valuation and future performance is weak at best. JWR looked at a lot of this data in the past and found better (but still weak) correlation between PE10 and future performance. He and ***** have tried to make way too much of the data, but it is still interesting.