Are modern investors over-anticipating a new secular bull market? Given trailing-GAAP multiples of 7x in 1950 and 8x in 1980, today’s 19x doesn’t leave much room for error. Earnings projections accelerate sharply in Q2 and Q3, setting up a possible disappointment that could rationalize the next market correction. Careful scrutiny of actual earnings – or changing expectations – will be especially important in 2013.
© Charter Trust Company
