What distinguishes the current high valuations from the dot-com bubble

Frankfurt The US stock index S&P 500 dominates the global markets. And a number of large corporations dominate the S&P 500. The independent US analyst Ed Yardeni took a look at this situation and summed it up: The rating of the top group is dangerously high. On the other hand, the comparison with the situation at the turn of the millennium, when the dot-com bubble burst, gives more cause for optimism.

Yardeni begins by stating: Measured by the country’s nominal gross domestic product, the valuation of all US stocks is very high. The ratio, named after its inventor the Warren-Buffett ratio, rose 2.9-fold in the third quarter. Another benchmark is the valuation of all stocks in the S&P 500 compared to the sales of the companies in the index. It was last at 2.7. Both brands have now probably risen to around 3.0, they say, so they are moving in very airy territory.