LOL...I think all of you know my answer already: Hell no they aren't cheap! I will admit that we are getting closer to where we need to be from a historical perspective from a P/E ratio standpoint. However, bear market bottoms usually end with P/E's down around a 6-1. We currently sit at a P/E ratio of 15-1.
As a result, Stocks need to drop another 50-60% in order to mark a TRUE bear market bottom when you look back at historical secular bear market bottoms following financial catastrophes. This puts the S&P at around 400-450.
Historically, as the chart shows, P/E ratio's are normally higher than a 6 because companies are growing at a faster rate from an earnings perspective because the economy is growing. The problem we have today is earnings are plummeting!
When earnings are collapsing like they are during our Great Depression 2, stock prices need to reflect this! You saw the S&P earnings chart two days ago that I posted folks. Earnings are down 90%. P/E's must drop back down to a 6-1 P/E in order to be attractive IMO.
Until stocks are fundamentally priced, buying equities is a fool's game.
History repeats itself folks.
Do you think anyone in 1929 thought that P/E's would drop back to where they were in 1920? The stock brokers would have laughed in your face you if you had predicted such a scenario. Who was laughing down the road in 1932? It wasn't the bulls!
Good luck tomorrow. I should be back on Wed.