Tuesday, April 3, 2012

Without Low Valuations and Widespread Skepticism, True Bull Markets Are Not Born

From Joseph Calhoun at Alhambrapartners.com:

"Bull markets are born from low valuations and widespread skepticism, neither of which is extant in the current environment. At best, stocks are currently at average historical valuations; at worst, based on measures such as the Shiller P/E, they are considerably overvalued. Sentiment, as measured by the various surveys, is approaching euphoric levels. I don’t know yet what will upset the bullish mood but the last few years have proven beyond a shadow of a doubt that when it happens, the move down will not be pleasant for the fully invested."

Read the full entry here.