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Peak EPS

Aug 06 2021

What If The Valuation Message Turns Out To Be Really Wrong?

  • Aug 6, 2021

Today’s Peak P/E ratio implies the S&P 500’s ten-year-forward annualized total return will be in the range of -3%. If this P/E ratio turns out to be as deceptively pessimistic as it was at its worst point in history, the S&P 500 could produce an annualized nominal total return of about +5% over the next decade. 

Jul 08 2021

Peak Earnings Yield A Rock-Bottom Forecast

  • Jul 8, 2021

At today’s 30.8x, the Peak P/E stands in the 99th percentile on all time horizons except the “New Era” (1995-to-date). Yet, that’s still five “handles” below the 35.8x all-time high recorded in December 1999. If that figure is matched, the S&P 500 will top 5,000. 

Aug 06 2020

A “Low-Risk” BUY?!?

  • Aug 6, 2020

So what do we make of July’s “low-risk” VLT BUY signal on the DJIA—the index on which the indicator’s creator (Sedge Coppock) did his original work? Sadly, not much.

Jul 08 2020

Low Single Digits?

  • Jul 8, 2020

We encourage diversity of thought in our shop, but even pessimists among our ranks have a hard time making the case for a ten-year negative return for U.S. stocks, which was recently predicted by the founder of a large hedge fund.

Jun 05 2020

“Peaking” Into The Future

  • Jun 5, 2020

Peak P/E has just moved into its top decile on a postwar basis. If the recent rally is indeed the first roar of a new bull, then this is a bull that’s a “baby” on a calendar basis, but quite elderly from a “character” perspective.

Sep 07 2019

Pricing In “Peak” EPS

  • Sep 7, 2019

A recent theme in our valuation work is that we no longer need to assume a full-blown “reversion to the mean” to illustrate current U.S. stock market risks: Even a reversion to “old” bull market highs in ratios like S&P 500 Price/Sales, Price/Cash Flow, and Normalized P/E would result in bear-sized losses.