A great chart from Wes Gray showing that "Warren Buffett's Favorite Valuation Metric" has reached the 95th percentile of valuation.
At the end of his blog post, Gray writes:
"But what are the alternatives? 2.5% 10-year treasuries?"
To which I think the best reply is a quote from Joel Greenblatt (from the book Hedge Fund Market Wizards):
“Another important point I try to teach my students is that you have to consider not only what your opportunity set is right now, but also what opportunities you may be forgoing later by investing now. If your opportunity set is not that great right now, maybe you should wait another 6 to 12 months before becoming fully invested.”