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The Trillion Dollar question is….Is the stock market cheap or expensive? Is that close to the phrase “Beauty is in the eye of the beholder?” Unless you live under a rock, most are well aware then Ben Bernanke is stepping down and Janet Yellen is taking over as the new Fed Chairperson.
Doug Short put together a really sweet set of valuation tools that compare valuations when Ben stepped into office and now. 3 of the 4 valuation tools are higher, even though valuations weren’t cheap when Ben took over. The above chart reflects that on average, the market is 21% more expensive now.
Not too long after Ben took over in 2006, the market took a small dip. Will it be different this time? Stay tuned!
If you would like to see other fundamental valuation, sentiment and pattern thoughts and how important Dow 16,000 could be, check out this free video on the subject sent to members within the past couple of months. See Video here