I’ve covered PE ratios a few times and why the argument that “the market is cheap on PE ratio valuations” is ridiculous. Well, today, we have a new argument popping up all over the place. The yield on the 10 year treasury dropped below the yield on the S&P 500 today and every value investor on earth came out to tell us how cheap that means stock are. Well, I got news for you morons. The yield on the Topix (Japan) has been higher than government bonds for about 15 years now and how’s that investment working out for Japanese investors? The yield is falling because deflation expectations are high and economic growth potential is low. If anything, the bond market is telling you not to buy stocks regardless of their “value”.