This month we discuss global growth and try to look at Australia on a relative basis and its valuations on an apples with apples basis with world markets.
The reason why is because many markets, including the United States, are trading on a 12-month trailing earnings PE ratio above their 10-year average. The US is on 22.7 times against its average of 19.7 times whereas Australia is trading at a discount 0f 18.5 times against its 10-year average of 19.2 times.
Simply looking at markets in these terms though is like comparing apples and watermelons.
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