Are Markets Overpriced?

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The Shiller PE ratio and the Buffett Indicator are two measures to indicate whether markets are over valued. These are not indicators to time the market. They just provide general indicators of value. Markets can certainly go higher -- if over valued -- or down -- of under valued. But they are useful as a gauge whether you should be watchful and cautious.

The Shiller can be found here. The Buffet Indicator here.  The Shiller PE is first, the Buffett Indicator is second. Both show overvaluation.






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In 1992, at the first U.N. Earth Climate Summit in Rio de Janeiro, Brazil, Program Executive Director Maurice Strong stated, very candidly: 

"We may get to the point where the only way of saving the world will be for industrialized civilization to collapse. Isn’t it our responsibility to bring this about?" (2)

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Thoughts on the election results

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As expected, the Democrats took control of the House, the Republicans kept the Senate. This is what the market expected, so there is no longer any uncertainty. Markets hate uncertainty. 

While I can't predict the future, I think we can expect markets to return some gains over the next several months. Today may be the confirmation that the correction has changed to another uptrend. I added to my equity holdings Monday in anticipation of this event. 

But having said that, make sure you have a plan to exit (sell) if the market should decide otherwise. 

Really, I don't think anything is going to happen as far as Washington D.C. is concerned. With a split government, there'll be a lot of talk, but little action. No changes in taxes, immigration, health care, etc. Just the status quo. Which also may be good for the markets. With Democrats in control of House committees, expect more investigations, grandstanding and plenty of theatrics. But this will go nowhere, and just waste time …
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