Sentences with phrase «peak earnings ratio»

When the price to peak earnings ratio was above 17 and the yield curve was inverted, stocks suffered annualized losses of -6.9 % over the following six months, -4.4 % over the following 12 months, and -9.3 % over the following 18 months.

In December of 1996, the price to peak earnings ratio (Popup: Why we use price / peak - earnings) was 21, a record at the time by that yardstick.

The two sets of bars on the right show both yield curve environments, but during periods where the price to peak earnings ratio was greater than 17.

That recession capitulation period also began with a peak earnings ratio of 14.8 when the recession was recognized.

In contrast, the average Price / Peak Earnings Ratio at the beginning of the three strongest second - year periods was 8.9.

The average price - to - peak earnings ratio was 18.2 for the six periods that delivered losses of at least 10 percent.

The price / peak earnings ratio is equal to the raw P / E when earnings are at a new high, as they are today, and is otherwise lower than the raw P / E.

At the market's actual 2000 peak, valuations were so high that even a future price / peak earnings ratio of 20 could have been expected to result in a nearly zero annualized returns over the following 10 years.

Based on newly released quarterly earnings figures, the S&P 500's price / peak earnings ratio is nearly 20.

For example, during the 10 years beginning in 1964 (when the price / peak earnings ratio approached 20 for the first time since 1929), the S&P 500 achieved a total return of close to zero, including dividends.

Problem is, this graph is the S&P 500 price / peak earnings ratio from 1950 to 2000.

For example, since 1950, the S&P 500 has enjoyed total returns averaging 33.18 % annually during periods when the S&P 500 price / peak earnings ratio was below 15 and both 3 - month T - bill yields and 10 - year Treasury yields were below their levels of 6 months earlier.

Even at the 1929 peak, the price / peak earnings ratio on the S&P 500 index was just over 20.

Since that time, the market's P / E on «forward operating earnings» has generally been substantially lower than the price / peak earnings ratio based on the highest level of trailing net earnings to - date.

It contains price to peak earnings ratios in the single digits during the early 1930's and late 1940's, as well as 1974 and 1982.

The two sets of bars on the left show the returns during periods where price to peak earnings ratios were less than 15 and in periods where the yield curve was either upward sloping or inverted.

It contains price to peak earnings ratios in the single digits during the early 1930's and late 1940's, as well as 1974 and 1982.

Not exact matches

The differences in opinion arise primarily over valuation and whether its rapid growth can continue to justify a price - to - earnings ratio that rarely falls below 40 and has peaked as high as 138.

Since earnings growth for the S&P 500 has never grown faster than about 6 % annually when properly measured from peak - to - peak or trough - to - trough, we're talking about a long term total return of about 7.2 % if - and it's a big if - P / E ratios were held at current extremes forever.

There is probably truth in both of those, but I do think it is important, in considering claims of irrational exuberance, to note that the earnings price ratio - interest rate relationship is in a very difference place than it has been in past peaks.

If we examine median price / earnings ratios of different groups in the S&P 500 at the 2000 market peak and at current levels, we observe the following pattern:

Moreover, if we look at periods when the economy was in an expansion, trend uniformity was negative, and the S&P price / peak - earnings ratio was above its historical average of 14 (it's currently 21), the average total return drops to a -8 % annualized rate.

In March 2000, near the stock market's bubble peak, the median price / earnings ratio on the largest 50 S&P 500 stocks was 35.6, while the median P / E on the smallest 50 S&P 500 stocks was just 10.1.

Higgins adds that valuations were much more frothy: «Back [in the 90s], the price / 12m trailing operating earnings ratio of the S&P 500 climbed to around 30 at its peak, which was roughly double its level in 1994.

While the current price / peak - earnings multiple is already at an elevated level above 18, what I'll call the «P / E equivalent» multiples on other fundamentals are: 21 on the basis of book values, nearly 23 on the basis of enterprise value / EBITDA (which factors in the increasing share of debt on corporate balance sheets), over 25 on the basis of revenues, and 29 on the basis of dividends (largely because dividend payout ratios remain relatively low even on the basis of normalized earnings).

I developed the price / peak - earnings ratio because it filters out the uninformative volatility of earnings during recessions, and provides a more useful framework to talk about stock values.

When the S&P 500 price - to - peak - earnings ratio has been above 17, the market's annualized return following the initial rate cut was -2.3 % over the following 6 months, 5.9 % over the following 12 months, and 6.2 % over the following 18 months.

The price / peak - earnings multiple is the ratio of the S&P 500 to the highest level of earnings attained to date, even if current earnings on the index have declined below that peak.

I generally base these P / E ratios on peak - earnings.

That was a bit worse than even the estimate based on a terminal P / E of 7, because the brutal 1974 bottom formed a sharp but temporary «V.» In contrast, in the 10 years beginning in 1990 (when the price / peak - earnings ratio was close to 11), the S&P 500 achieved a total return of fully 20 % annually.

This substantially exceeded the 10 - year return of about 14 % which would have been achieved had the 2000 bull market peak been held to a P / E of 20 (the market's actual price / peak - earnings ratio moved over 32 during the bubble).

By contrast, Microsoft had a price - to - earnings ratio of 83 at the 1999 peak.

The tech - heavy NASDAQ Composite Index more than tripled in value from 1998 through 2000, with a price - to - earnings ratio of more than 200 times earnings at its peak.

For the general population, the ratio of peak earnings to early - career earnings is only 1.24, according to the Bureau of Labor Statistics.

With cyclical companies, P / E ratios are typically lowest at the cycle peak, when companies have peak earnings, and high - to - nonexistent P / E ratios at the cycle trough.

The normalized price - to - earnings ratio of 40 is used as a cut - off because that is the peak (or very close to it) valuation that the entire S&P 500 has reached.

To illustrate, on the basis of Robert Shiller's P / E ratio, the S&P 500 has tended to peak at about 23 times trailing earnings before declining (although in 1929 they rose above 30 and in 2000 they rose above 40).

Price - to - earnings ratio is sensitive to cyclical peaks and troughs unless multiple years of earnings are used.

And the recent extremes in the median price - earnings ratios (P / E) and median price - sales ratios (P / S) actually went beyond the peaks hit in 2000 and in 2007.

As I mentioned earlier, the median price - earnings ratios (P / E) and price - sales ratios (P / S) actually surmounted the peaks at the end of the last two bull market cycles — the metrics went beyond the valuation peaks hit in 2000 and in 2007.

This chart is consistent with the valuation assessment of P / E ratios that are based on peak earnings, multi-year averages of earnings, or earnings that take into account the duration and extent of the earnings cycle.

The ratio itself may not be predictive because it ignores whether earnings are at a cyclical peak.

In March of 2000, at the crest of the dot - com bubble, the NASDAQ Index average P / E ratio peaked at an absurd 47 times earnings.

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When the S&P 500 price - to - peak - earnings ratio has been above 17, the market's annualized return following the initial rate cut was -2.3 % over the following 6 months, 5.9 % over the following 12 months, and 6.2 % over the following 18 months.