As markets tumble and selloffs expand, Oppenheimer’s John Stoltzfus says the market will bottom out and “rally from selloffs when its trailing 12-month price-to-earnings (P/E) multiple falls to about 16.5x.”
The market has sold off, hit this P/E level, then rebounded six times since 2014—something Stoltzfus says isn’t a coincidence, Business Insider reports.
The relative valuations of asset classes is what drives asset class price, Stolzfus writes. "Everything is linked and valuations are relative to the attractiveness of one asset class over another."
If you’re looking for a time to buy into REITs, CMBS or other NYSE assets, the sweet spot is when P/E hits 16.5, according to Stoltzfus. [BI]
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