Are Stocks Cheap? No.

Are Stocks Cheap? | Zero Hedge

As if the question actually needs to be asked, we thought the following 3 charts would provide at least some defense against the constant barrage of “healthy rotation” bullshit currently being used to maintain assets-under-management as professionals unwind their levered longs into a newly-willing retail public. As Gavekal notes, the following chart show that the median stock is trading at valuation levels only seen at the previous stock market highs of 2007 and 2000.

Measuring the valuation level of the median stock in an index can help mitigate the market-cap-weighted bias associated with many index level valuation statistics. This is important because index level valuations that are heavily influenced by a handful of large companies can give a misleading representation of prevailing valuations for most stocks.

This is not a pretty chart.


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About Bill Quick

I am a small-l libertarian. My primary concern is to increase individual liberty as much as possible in the face of statist efforts to restrict it from both the right and the left. If I had to sum up my beliefs as concisely as possible, I would say, "Stay out of my wallet and my bedroom," "your liberty stops at my nose," and "don't tread on me." I will believe that things are taking a turn for the better in America when married gays are able to, and do, maintain large arsenals of automatic weapons, and tax collectors are, and do, not.


Are Stocks Cheap? No. — 3 Comments

  1. They’re down to $45 billion as they’ve been tapering since December. Four reductions of $10 billion each so far.

    Any wonder why the stock market, the economy and bank stocks are really struggling here? I mean, besides Obamacare negatives kicking in.

    Why do you think institutional accounts are bailing while retail just sees “new record highs” on CNBC and starts jumping in big time.

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