Is today's price-earnings ratio too high?

Kopcke, Richard W., and Zhenya Karamcheva. “Is today's price-earnings ratio too high?”. Issue in Brief 11-7, Chestnut Hill, Mass.: Center for Retirement Research at Boston College, May 2011. http://hdl.handle.net/2345/bc-ir:104199.
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Abstract

The brief's key findings are: (1) To assess whether stocks are overvalued, analysts often compare stock prices to companies' cyclically-adjusted (10-year average) earnings. (2) To day's ratio of stock prices to cyclically-adjusted earnings appears high, which has often signaled a pending fall in prices. (3) However, cyclically-adjusted earnings are unusually low right now because they include two recessions. (4) A s the recession of 2001-02 is replaced by higher earnings, the price-earnings ratio will drop back to its historic average by the end of 2012.

Title
Is today's price-earnings ratio too high?
Author
Kopcke, Richard W.
Karamcheva, Zhenya
Center
Center for Retirement Research
Genre
report
Date Issued
May 2011
Publisher
Center for Retirement Research at Boston College
Series Title
Issue in Brief
Series Number
11-7
Version Identification
Version of record.
Persistent Link
http://hdl.handle.net/2345/bc-ir:104199
Use Restrictions
These materials are made available for use in research, teaching and private study, pursuant to U.S. Copyright Law. The user must assume full responsibility for any use of the materials, including but not limited to, infringement of copyright and publication rights of reproduced materials. Any materials used for academic research or otherwise should be fully credited with the source. The publisher or original authors may retain copyright to the materials.
Subject
Financing retirement

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