Note to stocks at exuberant valuations

To all the bulls touting stocks at supremely optimistic, exuberant valuations: this red corporate profit line is mean reverting lower from record highs. History suggests that this is a secular trend with much further to go. Corporations cannot have it all their way forever, sorry.

Or maybe the bulls are right, maybe this time is a new permanently high plateau?

…S&P 500 Price to Earnings (that declining red line above) over 29x today.

And here’s price to sales (revenues without all the financial manipulation ‘engineering’ used on earnings) today near the record hit as the tech bubble popped.  All looking good?

Then again, participants have not been this universally bullish (over 63%) since 1987 (right before that crash), so um, go with the flow or no?

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