by jessefelder
Today is the 30th anniversary of the stock market crash of 1987 so I thought it might be interesting to compare today’s stock market to that earlier one. Using the ‘Buffett Yardstick’ it’s clear that stocks are more than twice as highly valued as they were back then.
Personally, I prefer the chart of the median price-to-revenue ratio of the S&P 500 (via HussmanFunds.com and btw no, low interest rates do not justify high valuations). By this measure stocks are nearly three times more expensive than they were 30 years ago.
And to think there were those who thought stocks expensive in 1987. Could they have ever even imagined this?