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Wednesday, April 28, 2010

More on the S&P 500 Relative Value

Earlier this week, EconomPic detailed the relationship between the S&P 500 and nominal GDP and asked "Is the S&P 500 at Fair Value?"

Below is additional detail of those results by decade. Pretty interesting to start in the 1920's (the only data point is 1929) and work through the decades. Definitely shows how we got to the point where we were so extended at the earlier part of last decade.

Source: BEA / Irrational Exuberance