If you throw out the tech stocks that people still love, I think the market is fairly valued. I have been in it through this recent drop and haven't lost all that much money. Just being rational here, I mean I love the business models of YHOO and AMZN, but unfortunately I have to agree the valuations are ridiculous and I need better entry points for them than right now. I would be concerned though, I don't think there will be many that time the recovery in the market. Its so fragile in terms of mentality, but I can't help but sense that there will be a sudden pickup when the noise stops and people get over their preocupations that every CEO is cooking the books. While it would be nice to miss out on some downside if the market keeps tumbling, I think if people use a 2 year time frame, they will be ahead with stocks. Might be due to a rally coming very soon or a rally next year, but in the end I just don't see how anyone will make more money out of the market right now with interest rates at all-time lows and a modestly growing economy. I think its a fallacy to think that in the long run stocks will return to some "long-term trend" of earnings valuation. More people than ever own stocks and even with the dollar's fall we have a lot more money in our markets from abroad. Unless people suddenly decide they don't want any money in the market for their retirement savings and the foreigners take all their money elsewhere, you will have to see higher valuations...simple supply and demand. I rarely get into the short-term horizons most people do, but anything more than 2 years I think you will cost yourself being out of the market. Just my two cents....