A Warning From 1972 — And Where We’re Finding Value Today

In 1972, the most celebrated stocks in America traded at an average P/E of 42x. Analysts called them the Nifty Fifty — Polaroid, Avon, Xerox, McDonald’s. The logic was seductive. These were exceptional businesses. Unique. Impervious to cycles. A buy at any price. By 1974, they had fallen by an average of 60%. Most of the damage happened in just 18 months. The lesson wasn’t that these were bad…