Stock Market Valuation

For stocks to be a better buy than bonds based on the earnings yield rule, the stock market's forward P/E ratio would need to decrease from 21 to between 12 and 14.

Based on six market valuation indicators, the stock market is considered overvalued by three metrics, fairly valued by three, and undervalued by one. The speaker humorously notes this indicates potential for unusual market movements or specific astrological influences (like Mercury in retrograde) to affect outcomes, and suggests 'Capricorn dragons' might perform well next year.