Bubble Deniers Abound to Dismiss Valuation Metrics
- Shiller P/E. Tobin’s Q. Buffett Indicator. Ignore them all?
- It’s ‘usually an indication we’re trying to justify something’
Photographer: Thianchai Sitthikongsak/Moment/Getty Images
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Everywhere you look, there’s a valuation lens that makes stocks look frothy. Also everywhere you look is someone saying don’t worry about it.
The so-called Buffett Indicator. Tobin’s Q. The S&P 500’s forward P/E. These and others show the market at stretched levels, sometimes extremely so. Yet many market-watchers argue they can be ignored, because this time really is different. The rationale? Everything from Federal Reserve largesse to vaccines promising a quick recovery.