The stock market looks very expensive.

Stock prices have been rallying as earnings growth has been stagnating, which has inflated the forward price/earnings (P/E) multiple on the S&P 500 (^GSPC) to levels we haven’t seen in years.

“[A]t this stage, chasing the rally is akin to picking up nickels in front of a steam roller,” Gluskin Sheff’s David Rosenberg wrote on Wednesday. “[T]he forward multiple is back challenging the cycle highs and already tops the 2007 peak which is worrisome to me, but obviously not the masses.”

View photos P/Es are getting rich. More

It’s totally fair to say stocks are looking very expensive. And to some extent, it’s arguably fair to suggest that P/Es have historically reverted to their long-term averages (although not everyone would say that), which is a risk to prices.

But it’s a big mistake to argue that stock prices are doomed to fall soon because P/Es are too high.

In other words, you may be face-to-face with the steam roller. But that’s not to say that steam roller will ever actually crush you.

High P/Es reveal nothing about the near-term moves

Most experts agree that P/Es should be considered in the context of interest rates and/or inflation rates. Most experts would also acknowledge that P/E ratios, nevertheless, reveal little about how the market will move in the near-term.

“The forward P/E is a horrible indicator,” BMO’s Brian Belski said to Yahoo Finance.

Belski’s seen it all in his 27+ years on Wall Street, and he has shared some very smart observations about P/Es. In an October 2015 note to clients, Belski wrote (emphasis ours): “we have found that the average P/E at the end of prior bull markets has fluctuated rather significantly, averaging 18.4x but with a standard deviation of 5.4x. This suggests to us that valuation by itself is not reason enough for a bull market to end.”

View photos Note: This chart is from an October 2015 note. The “Current” P/E is higher today. (Source: BMO Capital Markets) More

As you can see, there’s no P/E level that signals an end to a bull market. Furthermore, we see that P/E ratios will sometimes drift very far above its average before stock prices turn. Notably, there are instances when a bull market will end even when P/Es suggest stocks are cheap.

Earnings growth becomes critical

Belski’s outlook for the stock market is not dictated by his expectations for P/E multiples. However, he does consider the role P/E fluctuations played in getting the market to where it is today.

“We believe the S&P 500 has a very good chance of delivering at least high-single-digit percentage gains in 2017 as the market transitions from P/E to EPS-driven gains and copes with the positives and negatives associated with a Trump administration and the changing policy dynamics it generates,” he said in a November 18 note.

An expanding P/E is a normal occurrence in bull markets. But in this next phase, Belski sees the market being fueled by earnings growth.

He reiterated: “Valuation multiple expansion has been a key contributor to stock market performance over the past several years as earnings growth has decelerated. However, given above-average valuation levels, we believe this trend has largely played out (particularly given the interest rate and inflation outlook), and earnings growth will be required for the next leg higher.”