Martin Wolf’s scary column “ Politics puts the skids under bull market” (October 17) makes some valuable points: over-leveraged balance sheets, the difficulties in governing in most EU states, and potential euro distress being only a few. However, perhaps he is mistaken to quote the Shiller cyclically adjusted price/earnings ratio as a significant factor for an overvalued US stock market.

Equity investors look forward, not backwards. The Shiller p/e is 80 per cent comprised of sub-growth periods under former president Barack Obama and does not reflect the current climate. A forward-looking p/e of 16 for the S&P 500 Index should ameliorate his anxiety.

Peter Kleeman
Crookham, Berks, UK

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