Like he did in the European crisis when he told everyone to sell right at the bottom? Let’s see:
…the market PE has come down to 13.3, then earnings are forecast to be unchanged next year. Alternatively, we could say PE is still 18.8 which means the “E” for earnings is expected to fall by 29 per cent (5107 divided by 18.8 is 272, which 29 per cent below 382).
…In 2009 the bond rate was 4 per cent. At eight times, the market PE at the bottom represented an earnings yield of 12.5 per cent (earnings yield is the inverse of the PE, and theoretically captures both dividend and capital growth) – so it was a spread, or “equity risk premium” of about 8 per cent at the time…A similar premium over the current bond rate would see the earnings yield at 8.75 per cent and PE at 11.5 times…
