Churchwork
01-12-2009, 03:01 PM
S&P500 earnings are at $40. Assuming that is as low as it gets and within 24 months earnings will be close to $100 then with interest rates as low as they are, the valuation deserves at least a PE of 15x so 15 x 100 = 1500 on the S&P500. The price to book value is so cheap at about 1x right now, don't expect it to go down to 0.7x or 0.5x. That's greedy wishful thinking. So the opportunity is now even though it may take some time for it take off!