According to the Bloomberg News, the U.S. stock market valuation has been below the 50-years average for the longest time since the Nixon administration, which means the investors do not trust the good factors of company earnings even after the 3-year bull market.
Data compiled by Bloomberg show that the analysts on average estimated the earnings of S&P 500 component companies will reach a record level of $104.78 per share and increase 125% compared to the end of 2009, which also is the biggest increase since 1/4 century ago. However, the S&P 500 price-earnings ratio has not broken through the 50-years average level of 16.4x for 446 days, which is the longest period since 1973.
The S&P 500 index has declined 14% since 2000, while the investors’ hearts are still fluttering with fears about the current stock market since the most serious financial crisis and the 21-months decline. $24 trillion out of the $37 trillion market capitalization evaporated in the financial crisis has been restored.
The U.S. investing institution Gamco Investors fund manager Howard Ward said many people say no to the stock market after suffering the two big bear markets, lightning crash and the ‘lost decade’. Of course, the bull market gradually overcoming the historical market panics is to reappear presently.