1 other thing i noticed was the longterm p/r they cite is a 15 year average. i imagine this graph to look a lot like Rich’s price/income graphs in “evidence of a housing bubble.” A 15 year average captures 1 cycle of p/r downswing and upswing successfully, however, in the case of the last 15 years it captures a normal downswing (92-98, 05-07) and an enormous upswing (98-05). Therefore, the “longterm” p/r of the last 15 years is higher than the actual longterm p/r of say, the last 45 years. This means the needed 34% correction is probably a bit higher.
