Monthly Archives: March 2009

Stocks are plummeting. What to do? That's not the right question...the right question is, "In past eras, what have stock returns looked like in the five years following prices like these?" We calculate the P/E ratio on stocks using Robert Shiller's method: Take the last 10 years of reported earnings on the S&P500; adjust for inflation; average those numbers. That produces a quite reliable figure for future earnings expectations -- the ...

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