PE (10 years average earnings) and historic SWR

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JWR1945
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Joined: Tue Nov 26, 2002 3:59 am
Location: Crestview, Florida

Post by JWR1945 »

BenSolar wondered how John Bogle could come up with an unexpected number.

I can't see where he would get a PE of 16 from. Anyone have a guess? I can't imagine the TSM is that low. Geez, he is talking about multiple expansion!.

I think that I have found the answer. If you look at the SP500/Barra value index, you will find it hit that P/E momentarily a couple of months ago. If you look at the other SP/Barra value indices (mid-cap and small cap), you will also find numbers around 15 and 16. These numbers exclude losses from the calculation of earnings.

I think that John Bogle blew it. He looked at the wrong index.

Have fun.

John R.
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