December 15, 2020 9:00am by
Barry Ritholtz
S&P 500 CAPE ratio now above 1929 levels for the only time apart from 1998-2001
Source: Jim Reid, Deutsche Bank
One of the things that market analysts love to do is to compare recent market action with some prior historical era, and declare “The market today is just like ____.” Recall the 1987 parallels a few years ago or the more recent 1929 versions.
These parallels can be based on absolute price, a chart pattern, number of consecutive up (or down) days, valuations based on P/E or P/S or P/B, the number of 1 or 2% days in a given period, or whatever. They come in both bullish or bearish guises, often rife with undeserved confidence.