Is the S&P 500 cheap or expensive relative to historical valuation metrics? The bubble talk seems to be mostly subjective and depends mostly on who is doing the talking. Someone?s who?s missed the run-up is more likely to call it a bubble and someone who is first chasing and buying in now is more apt to dismiss the bubble talk out of hand. It?s funny how our opinions depend so much upon what suits our lives and careers best.

The bubble talk is also subjective according to what sector or corner of the market one might be looking at specifically. Pointing to Netflix and Tesla and all the IPOs and screaming ?STOCK MARKET BUBBLE? isn?t exactly rigorous. But ignoring the over-the-top sentiment bullish surrounding US stocks these days probably isn?t healthy either. I?m certainly not.

But let?s get back to concrete measures of valuation for a moment?

Savita Subramanian put out a Valuation Cheat Sheet yesterday looking at the sectors and industries individually and the overall market.

The best chart from the research piece looked at the S&P?s current valuation based on 15 popular measures. It found that on most of these, stocks are still cheaper than they?ve been historically?

S&P 500: cheap or expensive?
In addition to the metrics contained in this report, in August we examined the S&P
500 across every valuation metric we could think of?we found 15?to gauge
whether US stocks still looked cheap vs. history. Here we provide an update of this
analysis. Today, 12 of the 15 metrics suggest the S&P 500 is trading below
historical average levels, while the trailing P/E and P/OCF suggest the S&P 500 is
trading slightly above average levels. Only the Shiller P/E?which bases normalized
earnings on the last ten years, when we underwent the biggest profits recession in
history driven by excessive leverage?suggests the market looks very stretched.