Here you can see the earnings for the S&P over the last quarters and how the earnings have increased over the last 24 quarters. Looking at the PE it does seem like the PE is still at an average value which means there might be room for S&P to go up in the next coming years.
2 comments:
why are you comparing the yearly EPS to a moving average of the PE ratio? The moving average, by design, will be much smoother than the original time-series. Also, just out of curiosity, what type of moving average? 30 day? 60 day? Additionally, is the moving average just a simple moving average - as with any financial data, more recent observations should receive a greater weight.
I'm just trying to get a feel for your methodology.
IGIR believes that stock prices have a certain earnings portion and certain speculative portion. PE tells us how the speculative portion of growing vis-a-vis the earnings portion. We attribute the higher PE to higher speculative action.
With that background, you will see that the earnings are growing but the PE has not grown leading us to believe that the fundamentals are strong.
90 Day SMA is being used here.
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