Emerging Markets Over Valued?

Something to think about moving forward.

An article from this weekends FT says that the MSCI Emerging Markets Index trades at around 2.1 price to earnings while developed markets are trading around a 1.7 multiple

In the past emerging markets were attractive because they were generally undervalued, this data would suggest that is no longer true. At this point most emerging market plays are going to be a function of currency exchange rates.

Analysts are mixed on the value of the US markets, many are upbeat as US companies continue to impress on earnings. However there are many bears out there like Andrew Smithers of London research boutique Smithers & Co who examined S&P500 PE ratios and "q" ratios (market cap/net worth) and he finds that the US stock market is around 40% over valued.

Who is right??? They probably both are and one should probably look at pair trades of high and low PE ratio stocks. If you are dabbling with options then look for cheap implied volatility in some of those stocks that might be extremely overvalued