“10-year at 2.7% is a 37X P/E for bonds, so should equity P/E really need to fall to 15?”
Of course, one can argue bond yield (interest rates) doesn’t matter. But, investors when look at what return they can get on various asset class, and when they factor equities return increases overtime and bond returns are static, even after factoring in equities risk, can and should come to a conclusion that equities deserve a PE that is higher than 15 PE. How much higher can vary from individual to individual and for individual security.
Hey 15X PE is great I can make more money, but I cannot wait for that forever.