Biotech Values

[DewDiligence]

In my view, the broad equity markets have been in a sideways trading range since, say, 2000.

I don’t think sideways is an apt description for a market that has doubled in the past two years (as the S&P 500 has).

During that time, broad-market P/E's have been declining: the P has stayed flat even as E's have been rising… P/E "multiple compression" has occurred several times during the previous century, following equally long bull markets and presaging broad new bull markets -- once the P/E has sufficiently compressed to make equities compelling again.

So far, so good.

How low a P/E is "sufficient?" Historically, under 10...

It would take some kind of global calamity for the P/E of the broad equity market to fall to less than 10, IMO.