Chart of the Day: The stock market’s P/E Ratio

By Felix Salmon
August 17, 2009
Bespoke Investment Group, via Abnormal Returns:

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From Bespoke Investment Group, via Abnormal Returns:

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Stocks are now trading at p/e ratios not seen since 2004. This is more than pricing in a recovery — this looks very much like pricing in a return to the status quo ante. Does anybody really still think that corporate profits are going to be able to rise faster than US GDP indefinitely? It seems from the level of the stock market that, yes, they do.

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