Wednesday, June 15, 2011

Long-term stock market valuation

This is research, not investment advice.  You trade at your own risk.


Source:  Robert Shiller’s home page 

Note also the current ratio of corporate profits to GDP:


And this:


Shrinking profits (forecast) imply shrinking market capitalization.  Corporations would have to buy back an inordinate amount of stock to maintain prices, methinks. 

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