Why The Market’s Extremely High P/E Is Worrisome
Market multiples such as price/earnings can’t help us predict when market up and down swings will occur. However, they are important diagnostic tools that tell us how expensive or cheap the market is, compared with the past, including times when major market swings often were preceded by extreme P/E levels.
Below is the Crestmont PE ( a proprietary P/E calculation). It shows a very overvalued market place with one of the highest P/Es in
the history of the stock market. These macro concerns keep us cautious.