The most recurring, unchallenged and wrong assumption in financial commentary is that the performance of the stock market is strongly and predictably correlated with the performance of the wider economy. If you question this people think you are insane, or simply an idiot.
The second is probably that multiples, such as p/e ratios, are meaningful taken on their own, without reference to other important things. It is like guessing the valuation of a building based just on its height. Looking at aggregate index multiples vastly compounds this error.
Most market commentary you will read will embed these two assumptions, mostly without even realising it. Many market commentators/strategists are paid to talk about “the market”, and not think about business models. This is why they get things like Amazon wrong for years.
In previous jobs I was lucky to speak with some of the most successful equity investors in the world. None of them talked about the market like this. Only talking head strategists from banks/asset managers do this because they are marketing people masquerading as money managers.
