If you'll look at your chart, those peaks in ~2002 & ~2009 were market bottoms, earnings had already dropped precipitously; and they were also black swan events. Historically from a F P/E and P/E ratio, the market is overvalued, even without a black swan. Also when you look at the debt market right now, it does not look healthy at all. That's usually a sign that something is brewing, usually a recession. However, stocks can continue higher, blow off tops are common place in the last phases of a bull market.
My fear is that the central banks are pumping so much liquidity into the market that they are driving up equities and pushing people out of safer assets into things like high yield bonds and momentum stocks. If we do have a recession, the pain could be worse than usual (for stocks) for the mere fact that the debt market could have liquidity problems when tons of funds begin to pull their money out at once from HY.
Not to mention all of the corporate buybacks that companies are doing by leveraging, because cash is too expensive to bring back overseas.
You can still invest in solid companies, but companies like Tesla, Netflix, anything with a super high P/E is going to be taken out back and shot (that doesn't mean the companies will go out of business, only that their stocks are much like Amazon in the 2000s.)
2002 was a black swan event (because of 9/11); 2009 not so much, many institutions had been calling the housing bubble since 2004 and even Greenspan acknowledged it in 2007. A bubble that is acknowledged as such 2 years in advance by the central bank is not a black-swan event (defined as a surprise event that is impossible to predict).
The 2008 bubble was eminently predictable. The problem was that no one knew the exact trigger, and no one had a politically acceptable means to deflate the bubble until the domino effect started, and then hedge funds and then major banks started collapsing.
Until the knife started falling, no one had a financial incentive to stop. After all, subprime mortgages have crazy interest rates, and if you're BoA or JP Morgan Chase, the government will probably step in to stop your collapse...
> companies like Tesla, Netflix, anything with a super high P/E is going to be taken out back and shot
Not that I disagree with you, but I believe a contrarian viewpoint would be something along the lines of "We are currently in the midst of an economic revolution as increasingly large swathes of activity are digitized and lingering mechanical/human processes are computerized. Companies likely to be successful in this new economy are unlikely to be the same ones which were successful in the old."
(To which the obvious rebuttal is probably "People are always saying things are about to be different, and they're usually wrong.")
Those gigantic spikes represent plunges in earnings, not spikes in share prices... If you look right before the spikes, you'll see PE ratios in the mid- to high-twenties.
https://www.quandl.com/data/MULTPL/SP500_PE_RATIO_MONTH-S-P-...
check how high it was in the 2000 and 2008, we're aren't even close