Still Room to Zoom?

HOW about that stock market? It won’t stop. Not even when experts like Mark Hulbert’s top-performing investment letters tell it to. For about three years back there, they thought it had gotten ahead of itself by traditional measures like price-earnings ratios and dividend yield. It took no notice. Now they’ve pretty well given up and converted to bullishness. (See M. Hulbert’s article, p. 52)

Our chart (below) offers a long-term interpretation: this epochal bull market may have been really a rebound from an even more historic public-policy disaster-the Great Inflation of the 1970s. Adjusted for inflation, the S&P 500 got back to levels seen in the late 1960s only a couple of years ago. Relative to the growth of the economy since 1960-real (inflation-adjusted) Gross Domestic Product-it has still, incredibly, not fully caught up.

PB

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Peter Brimelow

ER

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Ed Rubenstein

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HOW about that stock market? It won’t stop. Not even when experts like Mark Hulbert’s top-performing investment letters tell it to. For about three years back there, they thought it had gotten ahead of itself by traditional measures like price-earnings ratios and dividend yield. It took no notice. Now they’ve pretty well given up and converted to bullishness. (See M. Hulbert’s article, p. 52)

Our chart (below) offers a long-term interpretation: this epochal bull market may have been really a rebound from an even more historic public-policy disaster-the Great Inflation of the 1970s. Adjusted for inflation, the S&P 500 got back to levels seen in the late 1960s only a couple of years ago. Relative to the growth of the economy since 1960-real (inflation-adjusted) Gross Domestic Product-it has still, incredibly, not fully caught up.