Bill Hestor of Hussman Funds studied the historical market valuations during recessions. "If the price to smoothed earnings ratio falls to the 25 th percentile (a Shiller P/E ratio of about 9.7), that implies the S&P at about a level of 560. If the ratio falls to its 10 th percentile, that implies the S&P at 450. If we run the same analysis by applying the level of the 25 th and 10 th percentile of the price to sales ratio to the current per share sales of the S&P, the implied S&P 500 levels are 520 and 470, respectively."
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