dvilayphet

Glad to see you back, QJ.

Yahoo can also give you industry multiples if you don't have a BBG subscription, though I've often wondered how it goes about classifying industries.

Presumably multiples expand and contract over the business cycle because the near term cash flows are more valuable than the far term cash flows, and the value of those will fluctuate over the business cylce. Then the next question is how sentiment affects the multiples. With that, I don't see how you can do much other than look at long term averages. Possibly if you are clever enough, you can have some kind of demographic model that looks at the demand for cash vs risky instruments and as the demand for cash goes up (say for retirement expenses) then the risk premiums go up and that will lower multiples over time.