incomingpain
3 months ago
https://investor.vanguard.com/investment-products/mutual-fun...
The PE ratio is about 28x for large cap orgs.
The typical PE ratio is 15x; typically the 'safe' range 10-20x.
The markets are over valued compared to history. But then again that's not taking into account that you can be a stock trader on your cellphone and tons more people have entered the market. To be a 'bubble' though you need to be 100x to 200x. So no, there's no bubble at all and the 'overvaluation' is more likely due to the modern easy access to the stock market. 30x is probably the new normal; but there's a secondary check.
Go down the list of the S&P 500 and check the insiders: https://finance.yahoo.com/quote/AKAM/holders/
Typically 20-30% of a corporation needs to be held to maintain control; but the majority of the SP500 are not held by insiders anymore. like 1-2%. Akamai has essentially no defense against takeover. It's not even a hostile takeover in this case. It's just ready to be picked up by someone and remanaged.
But that's not what we're worried about, we're worried that the people in control, the owners, managers, insiders, whatever. They dont want to hold what they manage? Typically a bad sign for individual stocks but when essentially the entire SP500 is like this. It indicates powerful people who know the markets well are out. That's indicating some serious bad mojo.