HappySqurriel on 15 October 2008
Until the market finally collapses any recovery will be short lived ...
From what I was reading the other day, the average Price-Earnings ratio for the S&P over its existance has been 15. With how negative everyone's expectations for the worldwide ecconomy is for the next several years you would expect people to have priced in a drop in earnings for most stocks and the Price-Earnings ratio to be (about) 10 to 12.5; with the massive drop in stock values over the last few months the S&P had fallen so far that its Price-Earnings ratio was now (roughly) 15.
