The S&P 500 averaged 5,792.32 in October 2024 (the all-time high was on 10/18 at 5,864.67).
Nominal GDP was updated on Oct 30th at $29.349924 trillion for 3Q2024.
That yields a ratio of SPX/GDP of 197.35 vs. median of 81.
Stocks remain wildly, obscenely, off-the-chart overvalued.
The formula is GDPx = SPX.
29.35(81) = 2,377.
The market would have to fall 3,415 points just to hit median valuation at current GDP, or about 59%.
You can see a similar analysis here, where the median is 79.7 vs. current 200.7.
Real return from SPX since Aug 2000 is now about 5.1% per annum vs. 7.4% before that (including the Great Depression, the depression of 1920, and every collapse before that going back to 1871), 31% worse.
We are living through developments echoing the lunatic era of the 1920s, which ended in tears.
Owe no man anything . . ..
