Sorry for the double post. I don’t know what happened.

To continue my thoughts about “reverting to the mean”, I will give a simple example: P/E ratio for stocks were in the high single digits and low teens throughout the 80s. During the great stock bubble, average P/E ratios went to well over 30 (even higher for many tech stocks). After the bubble burst, P/E ratios came down, but stabilized to the mid and high teens, which is somewhat higher than before. “Higher plateau”? No. Lower long-term interest rates today compared to the 80s justify higher P/E ratios. It did revert to the mean after all. You just have to be careful how you define the mean.