Stocks? Still Overvalued.

"He's mad, that trusts in the tameness of a wolf, a horse's health, a boy's love, or a whor's oath."

-The Fool, King Lear 

Or the charlatans on CNBC.  As the chart shows, we've been living in a period of stock overvaluation for so long that no one recognizes real value anymore.  This is also the reason why equity returns for the past decade plus have been so dismal, and why they will likely continue to be dismal until valuations get back to reasonable levels.

Mike "Mish" Shedlock also has some excellent commentary on why stock returns will likely continue to disappoint.  The main reason?  Demographics.  The biggest holders of equities are baby boomers, and they are likely to generally be sellers of stocks to fund their retirements.  That factor is likely to be a major headwind (in addition to the current overvaluation) for stock returns in the coming decade.