There doesn’t seem to be any historic trailing price earnings charts or data available for the FTSE 100 (which are readily available for the US S&P500 and DJIA) that aren’t Shiller PE 10 type data sets. So I have created my own.
What this shows is that the average historic trailing PE for the FTSE 100 is 18.57 and we are currently at 13.41 (compared to a high PE of 30.45 in December 1999).
By contrast the S&P 500 historic PE ratio shows that stocks were mind-blowingly expensive in 2000 (PE 45) and they then dropped to about a PE of 15 in 2003. The long term average going back to 1900 is a PE of 16.38 and as at 28/3/2014 the S&P 500 PE ratio was 17.69.
The FTSE is a buy on this basis but the significant number of miners listed in the UK could be the factor dragging the FSTE 100 down compared to the US.