The market isn’t cheap right now. It’s just less expensive.
S&P 500 right now:
• \~25–26x trailing P/E
• \~20–21x forward P/E
Both are still well above long-term historical averages. Yeah, it’s come down from the 2021–2022 insanity, but “cheap” or “undervalued” is a massive stretch.
Every time the market dips a bit, you see the same posts: “This is the buy of the century!” “Stocks are on sale!” Nah. We’re still paying a premium. The forward multiple being 20–21x means investors are baking in pretty heroic earnings growth for the next 12–24 months. If that growth doesn’t show up (or rates stay higher for longer), we’re going to feel it.
I’m not saying crash incoming or anything dramatic. Just pointing out that calling current levels “undervalued” is coping. It’s less expensive than last year, sure. Cheap? Not even close.
What do you think? Are we in a permanent higher-valuation regime because of AI/tech, or is this still rich by any reasonable standard? Curious to hear the bull case that actually justifies 25x trailing.