Hey Nick,Think we have had this discussion before;"The only...

Hey Nick,

Think we have had this discussion before;

"The only thing that matters is Valuation'

You are right but how is valuation determined?

I take it you look back at history and get your answer, evaluating pe's and what not. Based on earnings estimates going foward then you come up with your projected valuations.
You conclusion being the whole global equity market is overvalued , hence you being an extreme bear.
Your dead right BUT for your scenario to become reality you need a lot of help from the global indicators that determine money flows.

Why is the DOW still at 8000 plus ?
With the news flow we have had over last 2 or 3 years it should be nearer 4000.
What's holding it up?
2 things - Liquidity and interest rates.

You constantly on about reality, reality for valuations short to medium term are dependent on the indicators that detemine money flow between asset classes, long term these indicators will change and historical average valuations may be revisited.
BUT if these indicators do not change especially with today's level of liquidity DO NOT expect the market to re-value for your sake.

It all depends your your investment strategy.

If you are a long term investor do not buy into this market especially on leverage.
If you are a SMART investor you will change your strategy to suit this market not withdraw from it.
Obviously if you are time poor and cannot put the time demanded in you should withdraw.

Yes, increase percentage of cash , do not leverage yourself but keep playing the game as this market is a traders dream.

Nick, not picking a fight just adding my 2c worth.

Rob.