It is pretty well established that high P/E have an inverse correlation with future valuation. Intuitively it makes a lot of sense, you are already pricing in a lot of the future growth, so even if the growth manifest, you hadn't really made money yet (because it already was priced in) what you essentially is betting on is that in the future where this growth becomes a reality, that future growth (future future growth) will be priced in, so the P/E stays the same.The average P/E of S&P 500 is also misleading, because of how top heavy it is e.g. Nvidia has a P/E of ~50 and make up ~8% of the S&P 500 in terms of value.It would be more relevant to look at the value of S&P 500 and what the average P/E of that value is.
>>60887457This is why Chainlink isnt going up anymore, everything was priced in by 2021
>>60887457P/E ratio is basically at an all time highonly an alien invasion can save this stock market
>>60887522But the issue is that P/E has been at these historical insane heights since the recovery of the Great Financial Crisis - and the returns has been solid!Not saying it is a new paradigm.. but not sure being on the sideline awaiting a crash is smart.
>>60887457this time is different
>>60887538not according to my numbersin the last 20 years its only been higher during the economic crashes of 2008/09 and 2020
