theluckycountry wrote:....
...... Most stocks are in that category now, their valuations pushed well above the underlying companies true value. And it's accepted as normal? Everyone looking to the future and believing the promises that these companies will be worth so much more in the coming years.
Well in the last year, or actually in the last six months The S&P's average P/E ratio dropped from an overpriced 37.24 down to 21.09 and is estimated to be heading to 17.63 twelve months from now. And conversely the average dividend has gone from 1.38% up to 1.54%.
So I see stock prices as having corrected themselves much closer to actual earnings value with little speculation left in the price. And as inflation and pessimism sets in that remaining speculation value may well fade away and stock prices over correct to the down side creating bargains in the stocks with the strongest earnings potential during inflationary and high energy cost times.
Woe be it upon you to have a new startup company that has yet to turn a profit.
