Author questions buying the S&P 500 at record highs due to weak jobs data and extreme valuations.
Unpriced research observations (excluded from Calls and Returns):
SPX — AVOID The author argues that current S&P 500 valuations are excessive, with Shiller CAPE at 40-41 and the Buffett Indicator above 215%, both historically extreme. The market is ignoring weak December jobs data (+50k nonfarm payrolls) while grinding to record highs. The author is waiting for better entry points rather than chasing the index at these levels. Exact non-equity contract requires separate historical validation; no generic proxy.
Current valuations scream caution:
- Shiller CAPE ratio sits at 40-41 (higher than almost any point in history except the dot-com peak).
- Buffett Indicator (total market cap to GDP) is around 215-224%, firmly in "significantly overvalued" territory by Warren's own metric.