One who intends to leave others better off for his having existed.


The median New York Stock Exchange (NYSE) stock is currently at a postwar record high P/E multiple, a record high relative to cash flow, and near a record high relative to book value.

"...As of June 2014, the median U.S. stock was priced at a post-war high at slightly more than 20 times earnings! Similarly, at about 15 times, the median stock is also currently priced at a record high relative to cash flow. Finally, the median price to book value ratio has only been higher than it is currently in two years since 1951 (in 1969 and in 1998 which were both followed by significant declines)..."

...Between June 2012 and June 2014, the  overall U.S. stock market went from most stocks being priced only slightly above average to almost all stocks being priced near post-war valuation records.

...valuations of U.S. stocks are much higher today than widely perceived or as suggested by the valuation of the popular S&P 500 Index.

...because valuation dispersion is relatively low today, there are not many areas to hide from overvaluation.

...A concentrated valuation extreme tends to loudly announce itself whereas a broad-based valuation extreme seems more stealth and, therefore, perhaps more dangerous.

...Since last summer, the S&P 500 Index has now suffered four significant selloffs.

...historically when the valuation of the median NYSE stock has been as high as it is today (e.g., from Chart 2 consider 1962, 1969, 1998, 2000, 2005, and 2007), the overall stock market has usually either suffered an outright bear market (i.e., in 1962, 1969, 2000-2001, and 2007-2008) or a correction (i.e., in 1998).

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