tag:blogger.com,1999:blog-7294165939647321702.post6933273110439558059..comments2024-03-11T10:31:06.107-04:00Comments on <center><a href="http://www.barelkarsan.com">Barel Karsan - Value Investing</a></center>: S&P 500 historical P/E vs today's P/ESaj Karsanhttp://www.blogger.com/profile/04493152766022812984noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-7294165939647321702.post-849901269938313702009-09-30T11:26:20.587-04:002009-09-30T11:26:20.587-04:00taking into account the cash on hand only matters ...taking into account the cash on hand only matters if they do something good with it. If it ends up in Executive pay or botched investments, then it was worthless.Mikehttps://www.blogger.com/profile/14107266405852257212noreply@blogger.comtag:blogger.com,1999:blog-7294165939647321702.post-37609965372486532502009-01-21T15:14:00.000-05:002009-01-21T15:14:00.000-05:00Barel, in all these P/E historical analysis there ...Barel, in all these P/E historical analysis there two things I always miss:<BR/><BR/>1. Sustainability of Earnings: ROEs and share of corporate earnings of GDP were at historical highs the last years. Part of it is sustainable (intangibles), but some of it was based on leverage in the financial sector.<BR/><BR/>2. Net Cash: At the same time, some non financial sectors (tech, pharma) have huge net cash positions after taking advantage of the good years. <BR/><BR/>Like Munger says: "Cash on the balance sheets or corporates has never been higher. If they all bought back there stock their P/Es would be trading at a 50% discount to the historical market average."<BR/><BR/>It would be nice if those of these factors were incorporated and have some clarity by sector. I thing Vitaliy from Contrarian Edge has done some analysis by sector.Unknownhttps://www.blogger.com/profile/02806457530727624618noreply@blogger.com