While a number of
simple measures of valuation have also been useful over the years, even metrics such as price - to - peak earnings have been skewed by the unusual profit margins we observed at the 2007 peak, which were about 50 % above the historical norm - reflecting the combination of booming and highly leveraged financial sector profits as well as wide margins in cyclical and commodity - oriented industries.
Not exact matches
Because as investors if you're looking at this current contemporary global macroeconomic backdrop from the 10 - 12 year perspective, I find it with the typical disclosure here that I'm not able to see with a perfect crystal ball or anything but it's hard to believe that traditional assets, that global equities, will be thriving in this environment just from the
simple perspective
of how overstretched they are from any reasonable
measure of valuation.
Both the gross profitability and
simple value B / P factors provide an interesting conundrum, appearing stretched on one
measure of valuation but less so on the other.