I’ve posted Entry #105 to my weekly Beyond Buy-and-Hold column at the Out of Your Rut site. It’s called Forget the S&P 500 Level, It’s the P/E10 Value That Really Counts.
Juicy Excerpt: I was having a discussion with some Valuation-Informed Indexing skeptics when the words popped out of my head — “An S&P 500 priced at 1,000 when the P/E10 value is 30 is the same as an S&P 500 priced at 500 when the P/E10 value is 15.”
That’s a pretty darn simple way of making the essential point. Is it so? It’s so. The evidence showing it to be so is at this point a mountain. Don’t take my word for it. Check it out yourself. But, if you are interested in knowing my opinion, please understand that, yes, I very much believe it is so.