Quick take: Based on the June S&P 500 average of daily closes, the Crestmont P/E is 97% above its arithmetic mean and at the 98th percentile of this fourteen-plus-decade monthly metric.
The 2011 article P/E: Future On The Horizon by Advisor Perspectives contributor Ed Easterling provided an overview of Ed's method for determining where the market is headed. His analysis was quite compelling. Accordingly we include the Crestmont Research data to our monthly market valuation updates.
The first chart is the Crestmont equivalent of the Cyclical P/E10 ratio chart we've been sharing on a monthly basis for the past few years.
The Crestmont P/E of 27.7 is 97% above its average (arithmetic mean) and at the 98th percentile of this fourteen-plus-decade series.
Crestmont Deviation from the Mean
Here are a pair of charts illustrating the historic Crestmont P/E ratio from its mean (average) and geometric mean with callouts for peaks and troughs along with the latest values.
