Wednesday, July 26, 2006

The cross-sector P/E ratios of S&P500

As we have talked recently about Graham's Margin of Safety and hence the valuation of stocks (by at least the one parameter P/E ratios), here is a nice colorful graphic of the current development across sectors:

S&P 500 P/E Ratios by Sector

For I have always stated that P/Es do not provide a sufficient basis for valuating the stock market, but merely a - say - starting point, one should be careful of talking only about that figures. Though the overall conditions are at least a good "starting point".





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