Mr. Short, I believe must be my long lost twin brother.
More gray haired.
Probably not a salsa dancer.
But my long lost twin brother none the less.
He focuses on Tobin's "Q quotient" whereas I am lazy and just look up a mathematically similar measure over at Dr. Robert Shiller's office, the S&P 500 P/E ratio.
The moral of the stories are the same.
The stock market is overvalued. It always has been since idiotic politicians decided us people were too stupid to know what to do and engaged in the largest and (soon to be) most damaging social engineering project ever - the 401k/IRA/government ordained retirement program.
Let's essentially ordain the stock market as the ONLY means by which you can save for retirement. AND HEY, GUESS WHAT, let's give 300 million Americans a TAX INCENTIVE to throw their money into the stock market regardless of whether or not its a good buy. No, that won't cause a bubble now, will it?
I'm not a conspiracy theorist, but something tells me Wall Street might have had a role in getting this legislation through.
Regardless, it's nice to see somebody older than me (and therefore wiser, because I know how you baby boomers like to dismiss any human without gray hair as a "moron") point out what I've been pointing out since (cripes???) 2006???
But, no, no. You kids go ahead. I'm just an evil, party pooping republican trying to bring everybody's good time down. You throw your money into the S&P 500 when it only has a dividend yield of 1.8% (Herb, point of tax preference duly noted). I'm sure some spectabulous Obama Unicorn will fly over and fart economic fairy dust to overcome all of our economic problems and all of you baby boomers will retire in comfort, as will, of course, all of you Gen X'ers and Gen Y's who believe in social security, medicare and unicorns that fart economic fairy dust.
I shall part, with something that will probably be lost on most of you pinning your hopes on the woefully underfunded 401k plan:
Enjoy the decline!