(Bloomberg) -- The dot-com bubble was a lot more picky.
Even on the day the S&P 500 Index hit its March 2000 peak an investor could buy a third of the index for less than 11 times earnings. Today that figure is just 6 percent.
While the average valuation for the gauge of U.S. equities is the same between the two periods, about 24 times projected earnings, its distribution among stocks has shifted markedly to the right, according to Bloomberg calculations. In other words, there are hardly any cheap stocks any more -- everything has gotten expensive.
According to Doug Ramsey, chief investment officer at Leuthold Group LLC, about 90 percent of U.S. market capitalization was trading at or below historical valuation multiples in early 2000. Even for a deep investor, this presented a very appealing environment, he wrote in a report Friday, contrasting the two eras.
“If this isn’t silly season, we don’t know what is,” he said. “Today’s market offers no place whatsoever for an acrophobic investor to hide.”
Traders have so far proven immune to concerns about overd stocks, pushing the S&P 500 to a fresh all-time high Friday. The prolonged bull market and expensive valuations at some point is going to translate into pain for investors, warned Goldman Sachs Group Inc. in November.
©2018 Bloomberg L.P.
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