Are stocks overpriced?

Some good discussion on our forum regarding current high stock valuations, based more on hopes than on earnings.

This chart of Price-Earnings ratios highlights the problem. PEs for both the MSCI World Index (ex-Australia) and the ASX 200 are close to historic highs (after the Dotcom bubble).

Price-Earnings

Strong earnings growth would soon fix this but there is little sign of that at present.

3 thoughts on “Are stocks overpriced?

  1. […] ASX price-earnings ratio is close to historic highs, suggesting we are in Phase III of a bull market — where stocks are advanced on hopes and […]

  2. tonytran2015 says:

    If stocks had not been overpriced how could there be market crashes in the past ?

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