Monday, September 14, 2020

Are we in a stock market bubble?

 

The graph above plots Prof Robert Shiller's cyclically adjusted price/earnings ratio or CAPE. Shiller is the bubbleologist who predicted the 1999 stock market bubble using a graph like the one above as well as the 2007 housing bubble.  The price/earnings ratio is a measure of the value of a stock, and we see that when it goes above 20, we generally see subsequent declines.  However, we have been above this value for the past decade.  

DISCLAIMER:  If I really knew, I wouldn't be teaching school.  

HT:  ZeroHedge.com

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3 comments:

  1. Cheating SpouseApril 10, 2021 at 1:41 AM

    Very informative post

    ReplyDelete
  2. Tax AccountantFebruary 10, 2022 at 11:22 PM

    Good information but for these type of risky work you should hire a tax accountant who can help you in a difficult situation

    ReplyDelete
  3. Tax AccountantFebruary 10, 2022 at 11:26 PM

    I was also into the stock market and an accountant helped me a lot to succeeded

    ReplyDelete

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