Better Buy Bitcoin?

Equity prices

The SP 500 (NYSEARCA:SPY) is expensive. The stock market price is currently about 119% of the GDP. Average annual total returns from that level is historically less than 1%. The cyclically adjusted price-to-earnings ratio is about 26, 58% higher than average. This is 92% as high as it has ever gotten. The 1929 peak with 97% and the 2007 peak was 95%. The tech bubble constitutes most of the period that was more expensive than the present. The implied future annual return is slightly negative. Globally, the price-to-sales ratio is as high as it has ever been.

Globally, the US market is one of the most expensive. Only two country markets have pricier CAPE ratios. The US market is also expensive relative to earnings, book value, sales, cash, and dividend yield. The only inexpensive country markets, such as Russia, have serious problems with both their economic and political systems.


Given the current opportunity set, how much of a portfolio should be allocated to cash? A lot. I don’t know the right answer with any precision, but it is probably somewhere between 20-30%. In Preparing For

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