Update: dictionary.com says twice a year... it continues with the definition with every two years: Biennial. In Britain, it seems, it might mean both... but in the U.S. biannual means twice a year.
We're talking about the price-to-earnings, or P/E, ratio. The current 12-month forward P/E ratio is 16.8, FactSet's John Butters said on Friday. This P/E ratio is above the 5-year average (13.8) and the 10-year average (14.1).. But just because stocks are expensive relative to their long-term average is no guarantee that prices are doomed to fall immediately.
Jeremy Siegel has suggested that the average P/E ratio of about 15 (or earnings yield of about 6.6%) arises due to the long term returns for stocks of about 6.8%. In Stocks for the Long Run, (2002 edition) he had argued that with favorable developments like the lower capital gains tax rates and transaction costs, P/E ratio in low twenties is sustainable, despite being higher than the historic average.