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Today's Stock Valuations Trounce 1987's

Published 10/19/2017, 03:54 PM
Updated 07/09/2023, 06:31 AM

Thursday was the 30th anniversary of the stock-market crash of 1987 so I thought it might be interesting to compare today’s stock market to that earlier one. Using the ‘Buffett Yardstick’ it’s clear that stocks are more than twice as highly valued as they were back then.

Market-Cap-To-GDP Ratio

Personally, I prefer the chart of the median price-to-revenue ratio of the S&P 500. By this measure, stocks are nearly three times more expensive than they were 30 years ago.

S&P 500: Median Price-To-Revenue Ratio

Source: HussmanFunds

And to think there were those who thought stocks were expensive in 1987. Could they have ever imagined that?

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