PFM - The Great Paradox Of The U.S. Market
2024-03-12 14:30:00 ET
Summary
- The US market's Shiller P/E of 34 as of March 1st is in the top 1% of history. Total profits are at near-record levels as well. If margins and multiples are both at record levels at the same time, it really is double counting and double jeopardy.
- For those who must own U.S. stocks even when they are generally very overpriced, there is a reasonable choice of relatively attractive investments.
- In contrast to extreme overpricing of U.S. equities, those overseas are a little overpriced, offering uninspired but positive returns.
Prices reflect near perfection, yet today’s world is particularly imperfect and dangerous.
1) The U.S. Market
Well, the U.S. is really enjoying itself, if you go by stock prices. A Shiller P/E of 34 (as of March 1 st ) is in the top 1% of history. Total profits (as a percent of almost anything) are at near-record levels as well. Remember, if margins and multiples are both at record levels at the same time, it really is double counting and double jeopardy - for waiting somewhere in the future is another July 1982 or March 2009 with simultaneous record-low multiples and badly depressed margins....
The Great Paradox Of The U.S. Market