[T]he market remains overvalued and, if anything, somewhat more overvalued than it was last October. As I have been saying for a long time ... – we are (since 2000) in the throes of a secular bear market, subject to strong cyclical swings in either direction. I continue to encourage investors to be skeptical, cautious, and defensive yet opportunistic. I suggest that they look to take advantage of the opportunities that present themselves while carefully managing and mitigating risk, which should remain their top priority.
Seawright presents the case for overvaluation using a variety of metrics, not the least important of which is the Shiller p/e. Long term investors remain skeptical of the present rally based on these metrics.
Nevertheless, the SP500 shot up over 100 points from 1099 between October 3-20, 2011, and is again above 1400 today, a nominal gain of over 27 percent in less than a year. That's a pretty long sucker rally.
