In early December, I expressed concerns about the potential for major losses for investors. Specifically, I was worried about growth stocks trading at absurdly high valuations. My concern was based on striking valuation data, like the spike in the chart below. That's not a subtle sign of stock market euphoria. An incredible $4.5 trillion worth of stocks were then trading at more than 20 times sales - even more than the $3.6 trillion worth of stocks that traded for more than 20 times sales at the peak of the dot-com bubble in early 2000. I'd never seen a period in which valuations were this rich. |
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