Current earnings cycle on it's last legs

Whilst I don't believe in using P/E's as a valuation method for individual stocks it can be useful to look at market P/E ratios over time to get a feel for how much investors are willing to pay for stocks. This article from Hussman Funds compares current P/E's based on one year trailing earnings with average P/E's over the last ten years and raises some interesting points:

• Firstly the current earning earnings cycle is the third-longest cycle since 1950. The longest cycle took place during the mid to late 90's, lasting 5 ½ years. A cycle of 4 ¾ years ended in 1981. The current earnings cycle is just 3 months shorter than that record. The average cycle is just a little over 2 years.

• The cumulative earnings growth in this cycle is the largest on record.

• The difference between P/E's based on 1 year trailing earnings and P/E's based on a 10 year average is now at it's largest since 1950. 31.5 compared to 18.
  

• The P/E ratio adjusted for 5-year earnings growth is currently 24.5. When this ratio is above 25 the total return on the S&P 500 has led to negative 5 year returns.
  

Considering the longevity of the current earnings cycle and it's cumulative growth in comparison to historical levels you would have to say it's on it's last legs. Unless, as the article suggests, you assume that the profit cycle no longer exists.