After some thought, I’ve decided to exit most of my stock positions in the USA except for one relatively small and extremely unpopular company that appears to be deeply undervalued. My portfolio now consists of: the aforementioned company, a basket of six small companies in Asia, and 77% cash.
You're ignoring the improbability of raising rates (https://www.nzscapital.com/news/the-improbability-of-rising-rates). With 3% 10y government bond, a 4.2% ERP (the LT average according to Aswath) and a mere perpetual 2% growth, a nineteen times earnings multiple is perfectly well warranted. You're likely to make a low single digit return on your cash (at best, rates these days have this characteristic of being set to 0) versus making 6-7% return buyin business américa.
I like this website (https://www.currentmarketvaluation.com/). The market remained above average for 20 years between 1955 and 1975 according with their heuristic.
You're ignoring the improbability of raising rates (https://www.nzscapital.com/news/the-improbability-of-rising-rates). With 3% 10y government bond, a 4.2% ERP (the LT average according to Aswath) and a mere perpetual 2% growth, a nineteen times earnings multiple is perfectly well warranted. You're likely to make a low single digit return on your cash (at best, rates these days have this characteristic of being set to 0) versus making 6-7% return buyin business américa.
I like this website (https://www.currentmarketvaluation.com/). The market remained above average for 20 years between 1955 and 1975 according with their heuristic.