Updated: Aug 14, 2019
Our current view is that the market is certainly not cheap and closer to fully valued. That doesn't mean that stocks can't keep rising.
One way to measure is the Value Investor Index which currently shows a 27% premium to the SP500. That is not 'excessive' on a historic basis, but certainly not a market that is 'cheap'.
This fundamental index is based on the US Real Private GDP trend, the 12 month Trimmed Mean PCE, and the long-term earnings trend of the SP500.
Excessive market valuations correlate with premiums of 60%-100%+ (2000, 2007) and enthusiastic market psychology coupled to a high level of speculation.
The term ‘euphoric’ does not describe today’s investing environment. Investors have been pessimistic since Jan 2018 with multiple market sell-offs on an anticipated economic weakness which has not come to pass. Hence the saying that 'the market climbs a wall of worry'.
Also, leverage (margin versus stock price) and the amount of money in cash or cash near vehicles points to lower levels of speculation than we normally see at market highs. That does not mean we can't have sharp selloffs, only that the fundamental indicators that often lead to a change in trend are not yet present.