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Discussion » Questions » Finance » It is take-it-with-a-grain-of-salt time. Some economists and the Royal Bank of Scotland see a stock market crash ahead. Do you? Why?
RosieG

It is take-it-with-a-grain-of-salt time. Some economists and the Royal Bank of Scotland see a stock market crash ahead. Do you? Why?

Economists Jim Rogers , Mark Faber, Andrew Smithers, James Dale Davidson are all warning of a huge stock market crash...by 80%! That it is imminent. Now I don't know who these fellows are. Maybe you do. Are they credible or not? Are you in the stock market? Are you worried?

Posted - December 16, 2016
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Responses


  • 3934
    According to the Internet, the price-earnings ratio of the S&P 500 (a relatively broad sample of US companiese) in Dec 2016 is around 26.

    That's probably too high. Historically, P-E ratios tend to settle in the 10-20 range.

    The current high P-E ratio suggests equities are overpriced relative to other investments, so a market correction will occur at some point. How soon and how severe the market correction will be is nearly impossible for anyone to predict.
      December 16, 2016 7:44 AM MST
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  • 113301
    Mahalo for your thoughtful and helpful reply OS! :)
      December 17, 2016 12:19 PM MST
    0