Saturday, December 18, 2021

1987 and 2007 versus 2021 stock market valuations

Since 1987:

The US GDP in Q2 1987 was $4.8 trillion

Wilshire 5000 capitalization 
was $3.0 trillion, 
or 62% of Main Street GDP.
 
In 2021, 34 years later, 
the Wilshire 5000 market cap
had increased 1,440% 
to $46.3 trillion, 
or 204% of GDP.

Since 2007:

The real GDP growth rate since the pre-recession peak in Q4 2007 was just 1.5% per year, less than half its pre-2000 historical trend.

In October 2007, Wilshire 5000 capitalization was 106% of GDP.

 In 2021, just 14 years later, it rose from 106% to  204%. 

The growth rate of the US economy has been cut in half, but stock market capitalization doubled ?

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