Nicole Lapin

economy and the economy right before the Great Depression and saying, quote, prices might not feel stable.

Let's decode this for a second because it sounds no bueno.

When he says prices, he's talking about valuations, how expensive stocks are now compared to what companies actually earn.

The simplest way to measure that is a price to earnings ratio or P.E.

Right now, the S&P 500's P.E.

is about 28 times earnings.

That means that investors are paying $28 for every $1 of profit companies are making.

Historically, the average has been closer to $15 or $16, so today's market is almost twice as expensive as normal.

If you look at the Shiller PE, also called the CAPE ratio, it smooths out earnings over 10 years to show a longer-term picture, and that is fitting around 39 to 40 times earnings right now.

For comparison, the only other times it's been that high

1929, 1999, 2021, all followed by major pullbacks.

In the late 90s dot-com bubble, the regular PE peaked around 33 and the Shiller PE hit around 44 before the crash.

So no, we're not saying that a crash is guaranteed, but when valuations stretch this far above average, it means that the market's priced for perfection.

Everything.

profits, growth, interest rates has to keep going exactly right.

So when Andrew says that prices might not feel sustainable, he's saying that the market is running hot and the higher it climbs, the thinner your safety net gets.

Now, the case of the missing $2.3 billion.

It starts in 2013.

A guy named James Patrick found an auto parts company in Ohio called First Brands Group, or FBG.

FBG is the kind of place that sells those DIY replacement windshield wipers to AutoZone and Walmart.