Saturday, September 15, 2012

Stocks Are Not Cheap

from Zero Hedge

Valuations; stocks are cheap; money-on-the-sidelines; everyone’s bearish; trend is your friend. We’ve all heard them and we’ve all played them but the following charts from Morgan Stanley will at least provide some nuance of sense for those stunned into silence by a market seeing its nominal price surging amid Bernanke blowing bubbles. The headline is – with real rates this low (and staying low for a few more years yet) current P/E multiples are extremely high and even on a long-run empirical basis, hope remains excessive at 22xShiller P/E versus an average 16x. Remember, a long-term investment is a short-term trade gone bad. But it seems for now that you buy because you’ll always be able to sell it back higher to the next smarter dumber greater fool.

Continue Reading at ZeroHedge.com…

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