Stocks More Expensive Today Than at Prior Two Market Peaks

One thing the financial news stations are not short of today are commentators arguing that stocks are cheap, or at least fairly valued. They usually point to the market P/E derived from forward earnings estimates being about average relative to the last twenty years, or the Fed model showing that stocks are cheap relative to bonds. Without going through the litany of reasons to discount these valuation measures, we simply point out that the median stock is now trading at a premium to the peak P/S ratio seen in either 2000 or 2007.