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Mean P/E avg for SP 500 is about 16, right now it’s at 22, add 15% to mean avg for extra cash in system brings mean avg to 18,5 so SP needs to drop about another 15% or 600 points to come in line or earnings have to increase more, so 3,500 bottom but feeling is it will stay higher 3,700 to 3,800 due to buybacks, unless Dems shaft the companies for doing them, which they are planning, sounds like a fun year in store, ciao
Makes a lot of sense ! How did you estimate `15% excess cash? Size of Fed Balance sheet x100/Total US market capitalization as back of envelop calculation?
yep,,, you got it, but took some out for bonds etc: so more like 10 to 15% but was being generous due to peoples fixation with stocks
Ok so it was a big envelope :) had to switch to an 8 x 11 🤓