Are Stocks Cheap Yet?

By on May 7, 2010

After one of the more interesting trading days in the history of the market, investors are probably asking the question of whether stocks have become reasonably priced; or maybe even cheap. David Leonhardt at the N.Y. Times Economix blog tries to answer this question by looking at the in vogue 10 year average earnings to determine a more meaningful PE ratio. Based on this measure, which has basically ranged from 10 to 30, stocks are neither cheap or expensive, as the PE ratio by this measure is about 20.

Source: Economix
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