[jkruer01]

Good Points.

I guess my first point says more that the stock market is not undervalued. It would be hard to say it is overvalued using this logic. Because if a stock is at the sticker price then technically it is valued correctly but because we demand a 50% MOS then it is too expensive for us. So you are correct, point 1 doesn't necessarilly mean the market it overvalued.

I guess my point with the 15+ years is that out of the history we have it hasn't been less than 15 years yet. The data is definately not enough to develop a statistically significant sample. However, as they say...history repeats itself.

I'm not saying that the market is going to drop starting this week, month, or even year. But I think that there are definately some warning signs that we need to pay attention to. The fact is noone actually knows when the market will drop. There were people saying the stock market was overpriced in 1997. They had to wait 3 years for their prediction to be correct.

The good thing is...if you follow Rule #1 completely then you don't have to worry about it too much. Because the more the market becomes overpriced the fewer number of stocks will be below their MOS. If no stocks are below their MOS then you just wait in cash.

Good points...good discussion.