Stocks on a 10-Year PE Basis Looking Expensive

By on December 5, 2009

David Leonhardt, in a piece written at the N. Y. Times, cites the work of economists Robert Shiller and John Campbell which shows a strong correlation between 10-year PEs and future returns. Right now the ratio is showing stocks to be expensive as the 10-year PE is above 20 (note: it was around 12 at the bottom in March; considered on the cheap side).

Leonhardt links to more analysis on the relationship between 10-year PEs and future returns at the source below.

Source:

Economix – N. Y. Times
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