by Jeffrey D. Saut
“Market bubbles occur when the price of an asset significantly deviates from its intrinsic value. There have been numerous bubbles predicted in my 20 years as a professional investor. Fortunately, only two, from the perspective of US investors, came to pass. The technology bubble in 2000 and the financial crisis in 2008.” — Scott Kubie, Chief Strategist at CLS Investments
As many of you know, last week I traveled throughout Mississippi and Alabama presenting to our financial advisors and their clients. My message was upbeat, yet many of those investors think the equity markets are in a “bubble.” Why this “bubbleicious” sentiment is so pervasive is a mystery to me, because using S&P’s earnings estimates for this year and next (~$114 and ~$134) leaves the S&P 500 (SPX/2052.32) trading at 18x this year’s estimate and 15.3x next year’s.