Frothy stock market and possilble crash

[JCA433]

The stock market is very expensive with price/sales 1.52 and CAPE P/E 24.5 yet people on CNBC claim stocks are cheap! How can the stock market be cheap when valuations are this high? My bubble valuation level is the price where it takes 10 years or more for revenue to catch up with stock prices with no change in stock prices and is near price/sales 1.7. The latest 12 month trailing revenue for the S&P 500 is 1092 and price is 1658 and price/revenue 1.52. If revenues grow an average of 5.2% per year it would take more than eight years for revenues to catch up with stock prices with no change in stock prices at 1658. That is near but not quite bubble levels which begin at 1856 which is only about 12 percent above 1658. The stock market has valuations already like those in 1929 but not quite peak 1929 valuation. The seller has huge advantage over the buyer at these valuations even long term buyers! One thing to keep in mind though is that parabolic blowoffs like the one underway now can result in huge price gains in short time period like in 1999 so short selling is risky during a blowoff. In 2000 stock market valuations reached off the charts highs with price/sales of 2.16 which is mega bubble level! It is not that expensive now but still far above historical averages. What are your thoughts and possible preparation for a crash later this year or next year? Do you think this stock market bubble will become a mega bubble like in 2000?

[eman]

very nice post i like this forum