PE Ratios lower now than at prior market tops

A recent article on Barron’s (here) posited that the market is “too cheap to pull back“.  They anchored their statement on a report by Jeff Kleintop at LPL Financial who did us a favor by producing the chart that follows below displaying the fact that the PE Ratio for the S&P 500 has been much higher at previous market tops since WWII.  The peak PE ratios have been near 17X or above vs. the current level of 14.5X trailing 12 month earnings.  Of course now may be different but Mr. Kleintop points out a significant market top now would be bucking a long historical tide.  I am rooting for Mr. Kleintop.  Jeb B. Terry, Sr. Feb. 12, 2013

Kleintop LPL Bull Mkt top valuations 2-4-13

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