Some thoughts on valuations froth and bubbles from IBD

hank

Interesting take and somewhat counter to my own intuition. Thought some might find it interesting.
http://news.investors.com/investing-mutual-funds/040314-695804-major-broker-dealer-sees-no-market-bubble.htm



http://news.investors.com/investing-mutual-funds/040214-695651-stock-market-mutual-fund-managers-outlook-for-2nd-qtr.htm

rjb112

Had no idea the P/E's of REITS were so high. The Vanguard REIT Index Fund has a P/E of over 36.

Charles

Not sure P/E is a good valuation parameter for REITs. Might be better served to eval REIT prices based on dividend.

Hey, remember when P/E of 10 was considered value?

scott

With REITs, many look at FFO instead.

http://www.investopedia.com/terms/f/fundsfromoperation.asp

Vert

A common argument, used in the article, to show that the stock market isn't in a bubble is to compare its current valuations with the highest valuations ever reached. If this isn't the greatest bubble of them all, they say, it follows that it isn't a bubble at all. Defining the term "bubble" loosely as "grossly overvalued", I'd call this rather faulty logic.