Stock market volatility is back

I’m not the only one saying the S&P 500 needs to drop.  An article at My Budget 360 has some good information and analysis about P/E ratios and why they matter.

Some are arguing that the fair value of the S&P 500 should be somewhere around 440 if we take a multiple of 15 which would be in line with historical P/E ratios.  That is a stunning number but makes sense.  That means the S&P would need to fall an additional 330 points, a drop of 42% from where we are currently at.  That is hard to imagine yet the math points us in that direction.

Check out the entire story – it’s good stuff.

gk

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