Not OP, but it's very simple - by historical standards, everything is crazy expensive, especially in the stock market, but not only (housing...).
Home price to median household income ratio is at all time high - current generations have to work almost twice as long to pay a house, compared to their parents.
S&P price / earnings ratio is around 27 now and it's been above 20 pretty much all the time since late 90s.
In the past it was hovering between 10-20 usually - here is a chart: https://www.multpl.com/s-p-500-pe-ratio
We have huge companies (the famous MAG 7) with PERs above 30. Given their scale, it's pretty much impossible to grow enough to reduce this PER significantly, unless we discover another planet with eager customers, or solve poverty worldwide.
So while they do make a lot of cash, if you were to buy the whole business, you would need to wait 30 years for it to pay back for itself...
I know people stopped thinking like that, and just hope the 'price will go up' and there will be a greater fool willing to buy even higher. But at some point, the music will stop, although nobody knows when though. And if you look at the history of when the music stops for the markets, it's not pretty.
Home price to median household income ratio is at all time high - current generations have to work almost twice as long to pay a house, compared to their parents.
S&P price / earnings ratio is around 27 now and it's been above 20 pretty much all the time since late 90s.
In the past it was hovering between 10-20 usually - here is a chart: https://www.multpl.com/s-p-500-pe-ratio
We have huge companies (the famous MAG 7) with PERs above 30. Given their scale, it's pretty much impossible to grow enough to reduce this PER significantly, unless we discover another planet with eager customers, or solve poverty worldwide. So while they do make a lot of cash, if you were to buy the whole business, you would need to wait 30 years for it to pay back for itself...
I know people stopped thinking like that, and just hope the 'price will go up' and there will be a greater fool willing to buy even higher. But at some point, the music will stop, although nobody knows when though. And if you look at the history of when the music stops for the markets, it's not pretty.