I think we have along way to go before P/E ratios get where they need to be. Amazon is trading at about 100 times projected 2003 earnings. I think that is insanity. If you don't look at the indexes, but just look at the fundamentals on a lot of the "most widely held," there are still a lot of overvalued stocks out there.
But people buy Amazon every day, so what do I know :)