In March, stocks traded as low as 11.7 times their average earnings
over the previous 10 years, adjusted for inflation, according to
finance professor Robert Shiller of Yale University. That put the
market at its lowest valuation since January 1986. Today, however,
stocks are selling at 18.4 times Prof. Shiller's measure of earnings.
That isn't only up hugely from March but is above the long-term average
of 16.3 times earnings.
In August, corporate insiders — officers and directors of public
companies — sold nearly 31 times as much stock as they bought. From
last September through this past March, in the depths of the bear
market, that ratio was just 2 to 1, according to TrimTabs Investment
Research of Sausalito, Calif. The long-term average is about 7 to 1.