Ghost of Igloi wrote:
Read the OFR report I posted to. The charts will show the overvaluation is a recent occurrence in CAPE, Tobin's Q and the Buffet valuation. Also, there are several other charts like peak earnings that leads one to believe we are approaching a market top. Of course the market can go higher, but it is doing so on momentum rather than valuation. That is why I believe investors are picking up pennies in front on a steamroller. That is, squeeze out another 10% only to lose 50%.
To paraphrase Robert Schiller currently on CNBC Asia "it is as if with lower interest rates, investors are willing to tolerate higher valuations." In my opinion the distortion in interest rates have unknown consequences.
well I didn't see a link, but I looked at this OFR report, which on page 3 clearly shows that CAPE, Q and the buffet indicator have been over average since around 1991. With a very brief exception of 2008.
Are you looking at something else? What interpretation do you have of 25 years of overvaluation but much, much, higher markets?
You could accurately say that we are MORE above average right now than normal, yes. But the indicator seems flawed if it can stay above average for 25 years.