The commodities comeback

The annual moment of truth has arrived. Companies are publishing their numbers for the full year of 2013 and it is time for us all to “brace for a moment of particularly inconvenient truth”, says John Authers in the Financial Times.

Profits aren’t rising fast enough to justify stock-market valuations. The market soared last year – forward earnings multiples are about 16 times at the moment. That’s “well above the historical average” of more like 13 times.

It’s also worth noting that, since 1976, the price/earnings ratio has only been above 17 for about 5% of the time [...]

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