Post #11180 by Said on the Berkshire Hathaway board

Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A) ❤

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the average US trend real earnings yield .... Today's S&P 500 valuation level corresponds to being 45% more expensive than any one of those averages

How much is a $ of earnings worth now, how much was it worth then? Lower interest rates justify higher stock multiples than higher interest rates. Until not too long ago we had historically low interest rates, justifying comparatively high multiples. Only right now valuations look high when taking this all-important factor into account.

As comparisons that do not take that into account is like "comparing apples with pears" (the original German saying for your "comparing apples with oranges"): Shouldn't comparing "today" with "then" limit the "then" to years with comparable interest rates?

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