I have to confess that I get a tremendous kick out of all of the market forecasts that constantly flood across my desk. Just like everybody else, I subscribe to several market information and data services. My name has probably been sold to—I do not know—some days it seems like a million different marketing companies. The instant experts of the internet are everywhere, of course. If you dare to log on to Twitter, Facebook, or LinkedIn, you will be buried in their messages with their very confident predictions and strong suggestions of exactly what is going to happen in the stock market.
That is a fool’s errand most of the time. Right now, for instance, we know (and what I am about to say is not opinion, it is just fact) the PE ratio of the S&P 500 is currently at one of the highest levels ever without a strong recession. There have been times (2008 comes to mind, 2003, 2020) where the market PE was more elevated than this. But these were periods of time when there was a severe recession or, in the case of COVID, restrictions in the economy and earnings had literally fallen off a cliff. You were trading at a high multiple of no earnings, basically. That is not the case right now. We have had healthy earnings growth for several years, including decent growth in 2025. Yet we are trading at twenty-nine times trailing earnings.
