… it will break your heart. Forward P/Es are now 19.6 based on 4/24 Earnings estimates, which are probably too high.
We are in Tech bubble P/Es right now.
I know you should never fight the Fed but …. I am not sure there is a lot of upside buying here.
Back in March, I posted that I think you’d be better off buying Verizon, Colgate, etc. than buying 10-year bonds at 0.6%. That was fairly close to the market lows.
However, the market has rebounded the last few weeks and now seems fairly ahead of itself. Here is a graph of the forward P/E (Price to Earnings ratio). I have a few entries for 2020.
You can see that back in March, stocks were very cheap based on earnings expectations at the time. However, stocks are up about 30% off their lows and earnings expectations have declined considerable and so now stocks are at their highest forward P/E since the tech bubble.
And I think these expectations are still way too high. Look at the expectations for the change in earnings across quarters.
Analysts are expecting almost a full recovery in earnings by Q4. I’ll take the under on that.