Stock valuations haven't gotten this bubbly since the dot-com era.
"The last time gains in stocks outpaced profit expansion by this much was in 1999, when equity valuations surged 19% in a year to 30 times reported profit. That bull market ended the following year, with the S&P 500 tumbling 49% from March 2000 through October 2002 as the dot-com bubble burst."
So far in 2013, the SPDR S&P 500 ETF (SPY - News) has climbed 15.81% YTD, despite recording the slowest earnings growth in "non-recession" years since 1998. The trailing 12-month earnings for S&P 500 (VOO - News) companies rose 2.4% in 2012 and just 2.5% for the first seven months of this year, according to Guggenheim Investments.
To view larger image of chart, read the original article here.
Looking ahead to Q3 2013, 85 companies have already issued negative EPS guidance, according to FactSet.
Since the beginning of the year, the SPDR Dow Jones Industrials ETF (DIA - News) is ahead by 14.71%, the Nasdaq-100 (QQQ - News) is up by 16%, and developed market stocks (EFA - News) are up by just 7.78%.
Since bottoming in 2009, the S&P's 145% rally has outlasted the average bull market length of 49 months by four months.
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