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.