Highest S&P Close Since June 2001
The S&P 500 closed today above 1261, its highest level since the early tides of the bubble bloodbath. The updated valuation worksheet shows a much firmer foundation for today's stock price levels than existed during the bubble days, with even cut-to-the-bone core earnings showing a multiple of 20, far more reasonable than the 30-plus levels reached late in the last century and earlier in this one.
Investors who bought in to hold on while the world was screaming bloody murder, in the wake of ensuing Enron and Worldcom accounting scandals, have enjoyed significant price appreciation. And many investors who have rebalanced periodically in accord with a strategic asset allocation have realized significant profits.
Asset prices will continue to fluctuate, creating realized losses for the many while creating opportunities for the steady. As General Boy once told us, "Few are the shepherds and many the sheep!"