What Most Investors Don't Understand About Today's Stock Market

10/7/2015 – A positive day with the Dow Jones up 122 points (+0.73%) and the Nasdaq up 43 points (+0.90%)

I have said it, and so did Rogers, Soros, Faber, Icahn and even Buffett. Either way you twist it, the stock market is incredibly and historically overpriced. To justify today’s valuations, the US Economy must be growing at a rate of 5%+ and not close to zero.

Which brings me to my next point. Market history is calling, and it’s saying stock performance will be crappy for another ~10 years

Because stocks are still fantastically expensive relative to most of recorded history.

And in the past, when stocks have been this expensive — or close to this expensive — performance over the next decade has been lousy.

Long-term valuation analysis suggests that we are still working through aftermath of the highest level of stock-market valuation in history — the peak of the tech bubble in 2000 — and that this workout process will take at least another 5-10 years.

The article above is definitely worth a few minutes of your time. It almost looks identical to my longer-term analysis found here. The Real Reason Behind Stock Market’s Recent Trouble

And while their conclusion is correct, they did get their cyclic composition wrong. What most people don’t realize is that it is not unusual to find the stock market selling at a P/E of 5-10 at the bottom of bear markets. As a result, today’s adjusted S&P P/E of 25 should send chills down your spine. And that is before earnings collapse.

Point being, there is quite a bit of discrepancy between today’s economic reality and market projections. The only remaining question is, how fast will this correction occur and what form will it take. Slow and steady or an outright collapse. We might find out soon enough.

This conclusion is further supported by my mathematical and timing work. It clearly shows a severe bear market between 2015-2017. In fact, when it starts it will very quickly retrace most of the gains accrued over the last few years. If you would be interested in learning when the bear market of 2015-2017 will start (to the day) and its internal composition, please CLICK HERE.

(***Please Note: A bear market might have started already, I am simply not disclosing this information. Due to my obligations to my Subscribers I am unable to provide you with more exact forecasts. In fact, I am being “Wishy Washy” at best with my FREE daily updates here. If you would be interested in exact forecasts, dates, times and precise daily coverage, please Click Here). Daily Stock Market Update. October 7th, 2015 InvestWithAlex.com

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