Turning Points F

I looked at a P/E10=8 Normal Market. I collected more turning point statistics. I focused on how long it takes to reach a top.

Scenario Surfer Conditions

I set the Scenario Surfer to a P/E10=8 Normal Market. I determined how P/E10 varied over 30 years.

Turning Points Data

Run 1.
P/E10 first reaches 20.0:
Value: 22.3
Year: 17
Highest P/E10 by Year 20:
Value: 33.4
Year: 20
Highest P/E10 by Year 30:
Value: 33.4
Year: 20

Run 2.
P/E10 first reaches 20.0:
Value: 22.8
Year: 17
Highest P/E10 by Year 20:
Value: 22.8
Year: 17
Highest P/E10 by Year 30:
Value: 24.6
Year: 25

Run 3.
P/E10 first reaches 20.0:
Value: never
Year: never
Highest P/E10 by Year 20:
Value: 17.4
Year: 17
Highest P/E10 by Year 30:
Value: 17.4
Year: 17

Run 4.
P/E10 first reaches 20.0:
Value: 20.3
Year: 21
Highest P/E10 by Year 20:
Value: 19.3
Year: 19
Highest P/E10 by Year 30:
Value: 20.9
Year: 30

Run 5.
P/E10 first reaches 20.0:
Value: 22.7
Year: 10
Highest P/E10 by Year 20:
Value: 26.4
Year: 14
Highest P/E10 by Year 30:
Value: 26.4
Year: 14

Run 6.
P/E10 first reaches 20.0:
Value: 24.9
Year: 14
Highest P/E10 by Year 20:
Value: 31.4
Year: 19
Highest P/E10 by Year 30:
Value: 31.4
Year: 19

Run 7.
P/E10 first reaches 20.0:
Value: 20.2
Year: 12
Highest P/E10 by Year 20:
Value: 41.0
Year: 16
Highest P/E10 by Year 30:
Value: 44.1
Year: 23

Run 8.
P/E10 first reaches 20.0:
Value: 23.7
Year: 17
Highest P/E10 by Year 20:
Value: 26.2
Year: 18
Highest P/E10 by Year 30:
Value: 38.4
Year: 25

Run 9.
P/E10 first reaches 20.0:
Value: 20.5
Year: 12
Highest P/E10 by Year 20:
Value: 31.5
Year: 16
Highest P/E10 by Year 30:
Value: 31.5
Year: 16

Run 10.
P/E10 first reaches 20.0:
Value: 21.3
Year: 11
Highest P/E10 by Year 20:
Value: 21.3
Year: 11
Highest P/E10 by Year 30:
Value: 23.3
Year: 28

Run 11.
P/E10 first reaches 20.0:
Value: 23.4
Year: 29
Highest P/E10 by Year 20:
Value: 17.7
Year: 15
Highest P/E10 by Year 30:
Value: 23.4
Year: 29

Run 12.
P/E10 first reaches 20.0:
Value: 20.4
Year: 4
Highest P/E10 by Year 20:
Value: 22.5
Year: 5
Highest P/E10 by Year 30:
Value: 22.5
Year: 5

Run 13.
P/E10 first reaches 20.0:
Value: 24.5
Year: 20
Highest P/E10 by Year 20:
Value: 24.5
Year: 20
Highest P/E10 by Year 30:
Value: 34.8
Year: 22

Run 14.
P/E10 first reaches 20.0:
Value: never
Year: never
Highest P/E10 by Year 20:
Value: 16.5
Year: 12
Highest P/E10 by Year 30:
Value: 16.5
Year: 12

Run 15.
P/E10 first reaches 20.0:
Value: 23.2
Year: 12
Highest P/E10 by Year 20:
Value: 33.4
Year: 20
Highest P/E10 by Year 30:
Value: 38.8
Year: 22

Run 16.
P/E10 first reaches 20.0:
Value: never
Year: never
Highest P/E10 by Year 20:
Value: 13.1
Year: 19
Highest P/E10 by Year 30:
Value: 19.1
Year: 23

Run 17.
P/E10 first reaches 20.0:
Value: 20.4
Year: 12
Highest P/E10 by Year 20:
Value: 23.5
Year: 16
Highest P/E10 by Year 30:
Value: 24.8
Year: 25

Run 18.
P/E10 first reaches 20.0:
Value: 23.1
Year: 20
Highest P/E10 by Year 20:
Value: 23.1
Year: 20
Highest P/E10 by Year 30:
Value: 26.5
Year: 21

Run 19.
P/E10 first reaches 20.0:
Value: 20.2
Year: 6
Highest P/E10 by Year 20:
Value: 26.0
Year: 7
Highest P/E10 by Year 30:
Value: 26.0
Year: 7

Run 20.
P/E10 first reaches 20.0:
Value: never
Year: never
Highest P/E10 by Year 20:
Value: 17.7
Year: 4
Highest P/E10 by Year 30:
Value: 17.7
Year: 4

Data Summary

Years for P/E10 to reach 20.0 [excluding 4 nevers]: 14.6 average (13.0 median); 4 minimum; 29 maximum.

Year of the high by Year 20: 15.3 average (16.5 median); 4 minimum; 20 maximum.

Year of the high by Year 30: 19.4 average (21.5 median); 4 minimum; 30 maximum.

P/E10 maximum by Year 20: 24.4 average (23.3 median); 13.1 minimum; 41.0 maximum.

P/E10 maximum by Year 30: 27.1 average (25.4 median); 16.5 minimum; 44.1 maximum.

Data Analysis

The high can take place in any year from 4 through 30.

Typical highs average 24.4 and 27.1, which is consistent with history prior to the Year 2000 bubble. Thirty year highs in this sample ranged from 16.5 to 44.1, which is a very broad range.

The most likely P/E10 tops (50% probable) range between 22.5 and 31.5.

The most likely (50% probable) amount of time that it takes to reach a top is between 16 and 25 years.

Conclusion

These results urge caution when making prediction. A very wide range of outcomes is consistent with the historical record.

If we combine this with Turning Point E, we see that the 30-year lows and highs average 5.6+9.2 and 19.4 years for a total period (peak to peak or valley to valley) of 34.2 years. The medians are 5.5+8.0 and 21.5 years for a total of 35.0 years. These results are consistent with the historical record.

Have fun.

John Walter Russell
February 21, 2009