Valuations are high, yes, but not at the levels seen in the late 1990s dot-com craze.
A Leuthold Group study used the same measures to compare today’s valuations against those in the 1990s.
Source: Leuthold Group via Bloomberg
Based on things like earnings, dividends, and cash flow, the S&P 500 now sits where it was in late 1997.
From there, the bull market ran another 2.5 years and added 60%.
History rarely repeats itself so neatly, but it’s true that bubbles grow bigger and last longer than most anyone expects. It’s when the bears give up that we ought to worry. We’re not quite there yet.
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