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Vendors aspired to get at least the same multiple of profit; acquirers found banks, bondholders and shareholders prepared to fund deals at that level and beyond.
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We went through a period where valuations were a multiple of expenses rather than a multiple of profits, and that has changed.
The old rule of thumb was that emerging markets were pricey when they traded at a higher multiple of profits than their developed counterparts, as they did in 1999 and 2007 just before sharp falls in prices.
Consumer-goods firms such as Hindustan Unilever and Nestlé's Indian arm now trade on their most expensive multiple of profits since the late 1990s, when the economy was last in the doldrums.
Its shares are trading at their lowest multiple of profits and book value for at least five years, except for a few months during the 2009 financial crisis (see chart 2).
Between late August and October 25th, almost $34 billion flowed into such funds, more than the annual totals for 2005 and 2006.Emerging markets now trade at a higher multiple of profits than developed markets, a development that has in the past been associated with peaks in emerging-market share prices.
More important still, the firm trades at a seemingly modest multiple of profits.
They used to be sold for multiples of profits that were ridiculous".
And prices for companies (as multiples of profits) are higher than even at the height of the credit boom.
When Japanese shares traded at intimidating multiples of profits in the late 1980s, sceptics were told that Western valuation methods simply did not apply to Tokyo stocks.
At the same multiple of operating profit that the company now fetches, using C.S.O.I. would add $100 billion to its worth.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com