Should we worry?

T Tomáš Novák Product manager · Prague · learning to invest, in public 3 May Public learning · Markets The S&amp;P is at P/E 28. I do not understand why anyone is buying right now, so I asked around. This is going to be a post where I think out loud and probably get some things wrong. If you are a real investor, please correct me in the comments - I would rather learn than be right. Quick refresher for anyone like me who had to look this up six months ago. P/E ratio is the price of a share divided by the earnings per share. If a company makes one euro per share per year and the stock costs twenty euros, the P/E is 20. You are paying twenty years of current earnings to own one share. The long-run average P/E for the S&amp;P 500 is about 16. Today it is 28. So on a simple historical reading, US stocks are about 75% more expensive than they have been on average for the past century. Today&rsquo;s reading is in the top 10% of the past century. The other times we were here: 1929, 1999, 2021. Here is the thing. The smart people I asked do not deny the number. They deny what it means . They say: earnings will catch up because of AI productivity. They say: interest rates are coming down so equities deserve a higher multiple. They say: this time it is different. The phrase this time it is different is famous in finance for a reason. Every time it has been said with confidence, the people saying it have been wrong within five years. But - and this is the part that humbles me - they have also occasionally been right. So what am I doing? I am still buying my monthly index fund contribution. I am not selling anything. I am also not putting any extra money in. I am holding a slightly larger cash position than I would normally hold, and I am sleeping fine. If you came here looking for a confident take, I do not have one. I have a P/E of 28, a long-run average of 16, and the genuine belief that I do not know which one is right today. That is the most honest answer I can give. If you have a better one, please share it. · Investing · Markets · Public learning 4 min read