Crestmont P/E and Market Valuation: January 2024
Quick take: Based on the January S&P 500 average of daily closes, the Crestmont P/E of 34.9 is 133% above its arithmetic mean, 153% above its geometric mean, and is at the 99th percentile of this 14-plus-decade series.
The 2011 article P/E: Future On The Horizon by Advisor Perspectives contributor Ed Easterling provided an overview of Ed's method for determining where the market is headed. His analysis was quite compelling. Accordingly, we include the Crestmont Research data to our monthly market valuation updates. See also his latest update: Understanding Secular Stock Market Cycles.
The first chart is the Crestmont equivalent of the cyclical P/E10 ratio chart.
For a closer look at the chart above, I have included the chart below starting at 1965. Note that the quintiles become more evenly spaced out.