I’d like to ask you your opinion on assessing market valuation by comparing it to available supply of money (like this: https://fred.stlouisfed.org/graph/?g=fKOR). Assumption behind is that in long term, similar proportion of available funds are allocated to the stock market.
In your speech at Vegas, you said that US stock market is terribly overvalued. Using this indicator, stock market would have to fall about 15% to go back long term median of cca 1.5. Overvalued, but probably not terribly. Still below 2007 level.
I know it will crash at some point in future – I’m more concerned about possible long-term returns at current valuation.
Using Stock/MZM is not my idea, but I find it very intuitively appealing. But I also highly value your opinions.
P.S. Excuse my English, I’m from Czech Republic.
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