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The S&P 500 is currently dominated by a handful of very expensive companies: https://www.slickcharts.com/sp500

If you look at the P/E of mid and small cap companies, their valuations look much more sane: https://x.com/sonalibasak/status/1970881745227833694



Sonali Basak acting like 16 P/E is some kind of deal for a company with no growth story. I'm waiting for 10s.


Where else are you going to park your money?


There are some good p/e companies with a dividend. Toyota for example.


Yeah, this is one of my current takes. I'm kinda afraid single stock picking based on my past performance...


VXUS, BNDX, EUR, real estate

The future is India and Africa, the last of the world with a demographic dividend ahead before rapidly aging like the rest of the world. Not easy for your average investor to get risk adjusted exposure there yet though.

(not investing advice)


Your money might be safer in casino chips.


Thing is even companies like NVIDIA that have been on a crazy run are still somewhat reasonable on pe at 50

Very confusing picture


At the risk of gross oversimplification (or maybe total misunderstanding), is this roughly the same as the difference between average and mean?


Average and mean are the same thing. I assume you meant median. It’s similar in this case, but it’s really more like the different between the average of the full list of companies and the average of the full list of companies with the top few hundred removed.


Ahh, thank you, yes - median. Thank you as well for the explanation.


Yes what you are looking for is market-cap weighting (S&P 500) vs "equal weighting" (e.g. the RSP etf) which gives 1 weight to each of 500 stocks, rather than weighting by size of the company.

PE ratio of S&P 500: 31

PE ratio of RSP: 21


The good/bad thing is more people are in index funds and are overexposed to the expensive companies (especially $TSLA)


There are a lot of people that only hold $TSLA and are quite obstinate about it on X. If Tesla can't perfect and launch completely autonomous cars and humanoid robots in the next ten years these people are going to lose most of their net worth. By relative comparison, index investors are highly protected.


Is that really A LOT of people? A few posters on X is hardly a lot of people, no? By contrast there is an awful lot of people who are currently overexposed to the usual suspects due to problematic index weighting. Which is aimed at meeting tax law quirks for tax efficiency rather than investing wisdom.


You're right, it's only 2% of the S&P 500.




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