User: House of Cards: charts: SPX index

SPX index

Image added from ritholtz.com/blog/

Comments

b|1NDb|1ND
What I find most stunning is the P/E spread. It's nearly 10x wide between 1996 and 2000, and narrows dramatically to only 1x when you take the difference from 2002 to 2007. What in the world caused that? Perhaps a heavier tech weighting back in the late 90s? 10/2/12
House of CardsHouse of Cards
One possible answer to your question might be that in the late nineties, the growth in the market was based largely on higher optimism for future growth, while in the early 2000's, the stock market growth was based on increased earnings. What I find interesting is that this chart shows the market has been essentially range bound for the past 16 years. 10/3/12
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