Odd Lots · Friday, July 10, 2026
Compared to periods with similar real yields, the current S&P 500 multiple of around 20.2-20.3 times earnings is historically high. In post-GFC periods with comparable real yields, the average S&P 500 multiple was 14-15 times. Even compared to the post-COVID environment, current multiples suggest a potential 10% contraction.
“Real yilds today on a ten year basis are running about the ninety fifth percentile, and they're around about I think two three give or take. So with that being said, if you take what the average SMP multiple when real yields were this high or higher, it's a scary low number. The S and P multiple would be around about fourteen to fifteen times, and we're currently trading on around about twenty point two to twenty point three.”
“If you take the post COVID environment, which I think is probably a better representation of what S and P operating margins look like today, we're still low. It's around about eighteen and a half times, So you're still talking about basically a ten percent multiple contraction versus where the Hey.”