Rule of 20 (which says market is fairly valued when CPI y/y and trailing P/E add up to 20) suggests market continues to look increasingly expensive
@LizAnnSonders **Chandler Bing**" Uhh, yeah!"
@LizAnnSonders Yes. We got fuel in 2009
@LizAnnSonders How can the rule of 20 make sense of the rate of and amount of M2 has increased? Does it not seem reasonable to say that companies are also priced in relation to economic conditions which are largely about, and influenced by, liquidity. More dollars chasing less goods.
@LizAnnSonders That's interesting. I guess the art of applying it is having the correct view of future earnings. And even then, who says the market can't stay expensive right up to DOW 50K. I can make a strong chart case for that target.
@LizAnnSonders Now try to margin adjust that pe so we don’t turn into South America.
@LizAnnSonders @barnes_law Show us your puts and shorts.