Stocks remain in a mature – but not obviously complete – bull market, with the S&P 500 a stone’s throw away from its 2007 record high of 1565. In the midst of it all, investors face a confusing mix of arguments – some that stocks are significantly undervalued, some that they are dangerously elevated; some that sentiment is overly defensive, some that it is overly euphoric.
There are a handful of observations in March-May 1972 at a slightly lower level that were punctuated by a modest market decline before the final advance to the late-1972 peak (that lag is enough to discourage any near-term conclusions in the present instance). The instance before that was in February 1966, which was promptly followed by a bear market decline over the following year. You get the picture.