"I did not imply that I spotted and reacted to the tech bubble and the real estate bubble. Nothing I said implies I did"
Then why in God's name would you think that we should listen to you now when you say there is no bubble that you can identify? You didn't know about those earlier ones. "
= because I have learned a few things along the way, and I am a better investor now than I was 5 and 13 years ago.
"Bonds are bubblish but not clearly a bubble when you take inflation into the calculation. Expensive but not a clear, indisputable bubble. Hence 'bubblish' For example, if you see deflation coming, then a 10 year yielding 2.8% is fantastically cheap and the opposite of bubblish."
I mean, WTF is that drivel? No word better describes it.
= um, could someone else jump in here - is this drivel? Maybe K doesn't understand how inflation and deflation affect the real value of bond cash flows.
Here's a primer: Let's say a bond yields 3%. If inflation is 2%, then the real return on that bond is 1%. BUT, and this is most un-drivelish, if the bond yields 3% and there is 2% deflation, then wow - that bond has a real yield of 5%! And since coach d and others have suggested deflation is a real possibility, then the point is valid and hardly drivel. So for those who foresee deflation or very low inflation, a 3% bond is not so bad. For those who see 3% inflation inthe future, a 3% yield makes bonds obscenely expensive. That's what makes a market.
"One way I judge cheapness is by 10 year cyclically adjusted PEs. In the US that number is a highish 22. In the countries I mentioned, the number is 8 or lower. That makes them cheap by this measure."
WTF does this mean? IN the US the number is "highish" (there is that soft language again) 22. For what? All stocks? A certain sector? "
Sounds like you never heard of CAPE. You could do some research on your own - here's a start, with some pretty pictures:
http://www.mebanefaber.com/2012/01/31/shiller-cape-for-the-g8/
as for adding an 'ish' to my adjectives - the world is not black and white. Is a bond absolutely expensive at 2.7% yield? I dunno. The same bond yielded 1.9% a few weeks ago, so it is a lot cheaper now. So bubblish. Is a CAPE of 22 high or highish? I think it was 45 in the tech bubble. It was higher than it is now through most of the 1960s and 1990s, but its average is around 17. So highish. Why do you have such trouble with the mushy middle?
CAPE is generally measured by the main market cap weighted index in a country. I buy ETFs that mimic that index in each country.
None of this is nonsense - My best guess is that you don't understand some of the terms and concepts so it sounds foreign and difficult to you.