We have an alternative viewpoint to Zero Hedge's conclusion that stocks are not cheap. "Cheap" not the issue. The chart below ignores the macro-interest rate environment – which we believe is crucial in determining the future direction of stock prices. ZH's contention that low interest rates typically indicate lower multiples is the exact opposite of the historical record. ~ Ilene
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
Presented with little comment aside to note the constant gibberish spewed forth from various media channels that stocks-are-cheap when in a ZIRP environment – that has never been experienced before (though low rates typically indicate lower multiples) – more stocks than ever before are 'expensive' on a price to forward-earnings basis…
Source: Morgan Stanley
