A common saying I've heard throughout my life is that history repeats itself, and the stock market is no exception. Some cycles are fairly frequent, while others are much rarer. Right now, we're approaching one that falls into the latter bucket, with a stock market that hasn't been this expensive in over 26 years.
There are various ways to measure how expensive the stock market is (based on the S&P 500 (SNPINDEX: ^GSPC)), but one go-to is the Shiller price-to-earnings (P/E) ratio, also known as the cyclically adjusted P/E ratio (CAPE ratio). At the time of writing, the CAPE ratio was 42.2, its highest level since the dot-com bubble when the ratio peaked at 44.2 in November 1999.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Unfortunately, the dot-com bubble didn't end well, but what does that mean for the current state of the stock market? Well, let's take a look.
The CAPE ratio is a useful metric because it puts into perspective how much you're paying for each dollar of earnings from S&P 500 companies. It looks at S&P 500 companies' earnings over the past 10 years and adjusts them for inflation, removing one-off events (such as the COVID-19 lockdown) that could skew the numbers.
#Stock #NVIDIA #signal
There are various ways to measure how expensive the stock market is (based on the S&P 500 (SNPINDEX: ^GSPC)), but one go-to is the Shiller price-to-earnings (P/E) ratio, also known as the cyclically adjusted P/E ratio (CAPE ratio). At the time of writing, the CAPE ratio was 42.2, its highest level since the dot-com bubble when the ratio peaked at 44.2 in November 1999.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Unfortunately, the dot-com bubble didn't end well, but what does that mean for the current state of the stock market? Well, let's take a look.
The CAPE ratio is a useful metric because it puts into perspective how much you're paying for each dollar of earnings from S&P 500 companies. It looks at S&P 500 companies' earnings over the past 10 years and adjusts them for inflation, removing one-off events (such as the COVID-19 lockdown) that could skew the numbers.
#Stock #NVIDIA #signal
6 hours ago
