1924 and today; stock-market valuation indicators
It’s theoretically possible that the stock market will play out a “Roaring ‘20s” scenario for the rest of this decade.
For that to happen, however, long-standing valuation indicators would have to be thrown out the window.
There are more differences than similarities between today’s stock market and the one that prevailed a century ago.
Today it is more overvalued than at almost any other time in U.S. history, while a century ago it was hugely undervalued.
In fact, in November 1924 — 100 years ago — the Dow Jones Industrial Average had merely climbed back to breakeven from an economic downturn earlier in the decade.
That downturn was so severe that one economist at the time declared that the world was “nearer collapse than any time since the downfall of the Roman Empire.”
The issue isn’t whether earnings and dividends can continue to grow, but whether they can grow fast enough to support current valuations.
History suggests that they won’t.
Mark Hulbert MarketWatch 28 October 2024
1929
Tillbaka till WoS 29 oktober 2024
https://englundmacro.blogspot.com/2024/10/wos-29-oktober-2024.html
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