[gbadman]

I think that making claims on the changing capital market climate based on historical P/E ratios may be measuring the wrong thing. A declining trend in P/E ratios may suggest a decline in valuations but it also may suggest a change in capital structure. Or it may suggest a combination of the two.

It would be interesting to look at the trend for EBITDA multiples over time instead: https://cloudup.com/cHNL3Wcy5yH [1]. In this view, you can see that TEV/EBITDA ratios are very similar today to what they were in 1995 even though they took a very circuitous route to get there.

1: S&P Capital IQ (exported just now)