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Here is the data:\u00a0<\/strong><\/em><\/p>\n <\/p>\n Source: Morningstar Stocks, Bonds, Bills & Inflation (except earnings data which is from Thomson Reuters I\/B\/E\/S)<\/p>\n Analysis \/ conclusion: <\/strong><\/em>Just thinking out loud about 2018 and the one thing that jumped out this past weekend, is that we haven’t seen a year of P.E contraction since 2011. (Look at the table, and compare earnings growth vs SP 500 return for 2010 and 2011.)<\/p>\n That is a stretch of 7 years.<\/p>\n Looking back at the 1982 – 1990 bull market, (and Thomson earnings data starts in 1985 on my spreadsheet) there were just 4 years where we saw “P.E contraction” in the 18 year bull market, and that was 1989, 1993, 1994 and 1995.<\/p>\n 1993 was the final year of the RTC corporation and the bank bailout after the commercial mortgage and real estate crisis of the late 1980’s and early 1990’s.<\/p>\n 1994 was the 6 rate increases by Greenspan which shut down the market even though SP 500 earnings grew 20%.<\/p>\n What shocks me is that in 1995, for those who remember the 36% return on the SP 500, and the start of the Tech and large-cap growth phase – SP 500 earnings grew a whopping 40% that year. (I did not know that until looking closely at the data tonight.)<\/p>\n Just navel-gazing before this weekend.<\/p>\n Usually P.E contraction occurs when, the Fed’s active (however 1994 was a huge surprise for the market – Greenspan shocked everybody that year), or some other “extreme” aspect to the capital markets happens.<\/p>\n We only know when something is a surprise when it happens.<\/p>\n More this weekend.<\/p>\n Thanks for reading…<\/p>\n <\/p>\n <\/p>\n","protected":false},"excerpt":{"rendered":" Suddenly all the prognosticators are bullish. Individual investor sentiment had risen the last few weeks: Bespoke put out their graph…<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[116,144,150],"tags":[],"class_list":["post-7424","post","type-post","status-publish","format-standard","hentry","category-morningstar-data","category-standard-poors-earnings-data","category-stock-market-sentiment"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/7424","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7424"}],"version-history":[{"count":1,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/7424\/revisions"}],"predecessor-version":[{"id":7426,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/7424\/revisions\/7426"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7424"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7424"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7424"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}\n\n
\n <\/td>\n <\/td>\n <\/td>\n <\/td>\n<\/tr>\n \n <\/td>\n Actual dollar EPS<\/strong><\/em><\/td>\n <\/td>\n SP 500<\/strong><\/em><\/td>\n<\/tr>\n \n <\/td>\n SP 500<\/strong><\/em><\/td>\n Y\/Y gro<\/strong><\/em><\/td>\n Total return<\/strong><\/em><\/td>\n<\/tr>\n \n Calendar ’19 (est)<\/td>\n $160.81<\/td>\n 10%<\/td>\n <\/td>\n<\/tr>\n \n Calendar ’18 (est)<\/td>\n $146.24<\/td>\n 11%<\/td>\n <\/td>\n<\/tr>\n \n calendar 2017 (est)<\/td>\n $131.47<\/td>\n 11%<\/td>\n 20.0%<\/td>\n<\/tr>\n \n 2016- actual<\/td>\n $118.10<\/td>\n 1%<\/td>\n 12.5%<\/td>\n<\/tr>\n \n 2015 – actual<\/td>\n $117.46<\/td>\n -1%<\/td>\n 1.380%<\/td>\n<\/tr>\n \n 2014 – actual<\/td>\n $118.78<\/td>\n 8%<\/td>\n 13.69%<\/td>\n<\/tr>\n \n 2013 – actual<\/td>\n $109.68<\/td>\n 6%<\/td>\n 32.40%<\/td>\n<\/tr>\n \n 2012 – actual<\/td>\n $103.80<\/td>\n 6%<\/td>\n 16.00%<\/td>\n<\/tr>\n \n 2011 – actual<\/td>\n $97.82<\/td>\n 15%<\/td>\n 2.11%<\/td>\n<\/tr>\n \n 2010 – actual<\/td>\n $85.28<\/td>\n 40%<\/td>\n 15.06%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n