On Monday, September 22, the S&P 500 shattered a historic threshold: its price-to-earnings (PE) ratio climbed past 30 for the first time in over twenty years. That figure isn’t just a milestone, it’s a warning.
Wall Street often points to softer, adjusted PE ratios in the low 20s to reassure investors. But those numbers rely on accounting tricks. Using official GAAP earnings, the reality is stark. With $222.55 in trailing earnings, today’s S&P valuation translates to a multiple above 30. And that is an unmistakable red flag. History shows that stocks this expensive almost never deliver strong long-term gains. Instead, they set the stage for years of disappointment, and sometimes outright disaster.
