Turning Points D

I looked at a P/E10=26 Bear Market. I extended the period to a full 30 years.

Scenario Surfer Conditions

I set the Scenario Surfer to a P/E10=26 Bear Market. I determined how P/E10 varied over the next 30 years.

Turning Points Data

Run 1.
Lowest P/E10=11.7.
Year 30 P/E10=17.3.

Run 2.
Lowest P/E10=6.8.
Year 30 P/E10=9.4.

Run 3.
Lowest P/E10=3.6.
Year 30 P/E10=10.2.

Run 4.
Lowest P/E10=10.5.
Year 30 P/E10=11.5.

Run 5.
Lowest P/E10=8.1.
Year 30 P/E10=15.4.

Run 6.
Lowest P/E10=10.0.
Year 30 P/E10=12.6.

Run 7.
Lowest P/E10=9.1.
Year 30 P/E10=14.6.

Run 8.
Lowest P/E10=10.6.
Year 30 P/E10=12.2.

Run 9.
Lowest P/E10=7.1.
Year 30 P/E10=10.2.

Run 10.
Lowest P/E10= 7.5.
Year 30 P/E10=18.4.

Data Summary

Lowest P/E10=11.7, 6.8, 3.6, 10.5, 8.1, 10.0, 9.1, 10.6, 7.1, 7.5.

Year 30 P/E10=17.3, 9.4, 10.2, 11.5, 15.4, 12.6, 14.6, 12.2, 10.2, 18.4.

Data Analysis

The lowest value of P/E10 ranged from 3.6 to 11.7. The middle values of the lowest P/E10 were 8.1 and 9.1. [The median was 8.5.]

The Year 30 P/E10 ranged from 9.4 to 18.4. The middle values of the Year 30 P/E10 were 12.2 and 12.6. [The median was 12.4.]

In 6 out of 10 sequences, P/E10 fell below 10.0.

In 4 out of 10 sequences, P/E10 fell below 8.0.

Conclusions

It is not necessary to extend the P/E10=26 Bear Market data to the entire 30 years available.

The Year 30 results are reasonable, considering that these are data from a long lasting (secular) Bear Market as opposed to a Normal Market (P/E10=12.4 compared to P/E10=14).

Have fun.

John Walter Russell
February 7, 2009