# Fair valuation of US stocks?



## markrmau (30 April 2005)

US stocks typically trade at higher PE and lower yield than AUS stocks.

I understand that this is because tax laws in US strongly favour capital gain over dividend payments. (is this correct?)

So what would an equivalent ratio be? ie Aus P/E 15, Yield 3% == US P/E 20?

Given the recent profit upgrades, is S&P500 undervalued?


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## salz (1 May 2005)

ABN Amro looks attractive to me.


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## Smurf1976 (1 May 2005)

It is my understanding, from reading the comments of various analysts and others over the years, that the long term average P/E for US stocks is 14. Aound 7 at the bottom of a bear market, 28 and above being offical bubble territory.


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