wildbill,


I think you could agree with me that the S&P is the index that represents what the market is valued at. Assuming this to be true, the market is overvalued and it has nothing to due with politics, terrorism, but has a lot to due with stupidity.


In one of my previous posts I mentioned an article buy Tom Philpott called "Bears Prowl At The Morningstar Conference." Jeremy Grantham, a founding director of Grantham, Mayo, & Van Otterloo states "the S&P is worth 750" versus its current level of 950 to 980. This article came out on 7/3. Furthermore, he states that the long term real yield of equities stands at around 5.7 percent. So, he has calculated that the P/E should be around 17. When this article was published the P/E was at 25, now it's a bit less.


Without all the nonsense going on about accounting, corruption, politics, and war, the market is still overvalued. Whoever has their money in stocks that are not worth their book value or less will get hurt big time. There are just too many variables that could send the stock market down the tubes, and this is why I am out of the market right now. I think in the near future we are going to see some big drops in the markets, even to stocks that are undervalued just due to panic setting in. I am waiting on the sidelines for things to cool off.


Good Luck


Mark