You know a market is overheated when traders/brokers are looking for new metrics to justify the stratospheric prices of stocks, in the '00 it was "clicks" remember those -- its like saying "we lose money on every sale, but will make it up on volume!" Anyway, some brokers that I can of respect have decided that the standard p/e is no longer a good measure (considering we are at historical highs -- or very near there) and where companies profitability is also a historical high levels -- these things have a way of returning to the mean!
However, if your job is to sell the market, then you find GAAP adjusted models, or using future statements as good metrics. There are a number of ways to show that the market is not yet fully valued.
However, as a prudential investor the rule has to hold -- if it looks expensive it probably is expensive; better to leave some money on the table than being steamrolled out of the market.
However, if your job is to sell the market, then you find GAAP adjusted models, or using future statements as good metrics. There are a number of ways to show that the market is not yet fully valued.
However, as a prudential investor the rule has to hold -- if it looks expensive it probably is expensive; better to leave some money on the table than being steamrolled out of the market.
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