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Experts Warn That The “Scariest” Stock Market Signals Are Flashing Red – Michael Snyder
So many top professionals in the financial industry are sounding the alarm about a coming stock market crash right now. And there certainly have been rumblings in 2018 – not too long ago we had a three day stretch that was called “the tech bloodbath”, and during that time Facebook had the worst day for a single company in stock market history. But we haven’t seen the really big “crash” yet. Many have been waiting for it to happen for several years, and some people out there are convinced that it is never going to come at all. Of course the truth is that we are in perhaps the largest stock market bubble that our nation has ever seen, and all other large stock market bubbles have always ended with a major price collapse. So whether it happens immediately or it takes a little while longer, it is inevitable that stock prices will eventually return to their long-term averages.
Doug Ramsey, the chief investment officer at Leuthold Group, is one of those that is sounding the alarm. Unlike price to earnings ratios, price to sales ratios are very hard to manipulate, and he has pointed out that price to sales ratios are higher than we have ever witnessed before.
In particular, when you look at the median stock price to sales ratio, it is the highest that it has ever been and it is twice as high as it was in February 2000…
He also shared a chart which he claims is “unfit for a family-friendly publication” that shows how in terms of median price to sales ratio, the S&P 500 is twice as expensive as it was in 2000.
“Overvaluation in 2000 was highly concentrated; today it is pervasive, with the median S&P 500 Price/Sales ratio of 2.63 times more than double the 1.23 times prevailing in February 2000.
Read the rest of this article at: Experts Warn That The “Scariest” Stock Market Signals Are Flashing Red
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