The Likely Narrative Through Year End, The Bear Market Rally Of 1929-30, Historic Overvaluation

In this weekend’s WSJ, in his Intelligent Investor column, Jason Zweig denied that the stock market was in a bubble citing a 21x forward P/E ratio. Unfortunately, that is the wrong metric to use as it is based on overly optimistic analyst assumptions. Both Jim Stack’s Investech Newsletters, which cites the market’s trailing 12 month P/E ratio, based on earnings that have already occurred, at 36.17, along with a number of other metrics including the Price / Sales ratio and the Buffett Indicator and Crescat Capital’s Valuation Model suggest this is in fact the most expensive market in history i.e. a bubble.

Those of you who follow me on Stocktwits and/or Twitter know that I have been going through stocks meticulously during 3Q Earnings Season, pointing out their overvaluation one by one. Last week, I showed this with regard to Walmart (WMT), Home Depot (HD), Nvidia (NVDA) & Workday (WDAY), none of which could get any traction off of good to great quarters.

May you live in interesting times – a Chinese Curse

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