Neglected this parabolic in my recent analysis: the Russell 2000 small cap index.
Now see the p/e valuation, forward and trailing, compared to the Nasdaq and SP500:
And the p/b valuation versus history (and higher now since this 31 Oct read):
80% of this year’s bumper gains in the Russell are accounted for by the rises in p/e and p/b valuations, i.e. earnings have not increased, just price. And by both measures, valuations are historically frothy – unless earnings rise by some ludicrous multiple next year.
This is how the Russell 2000 chart looks on a 12 month view:
Disclosure: I am now short the Russell 2000.