This post is about this one illustration created by the boys down in Gainesville.
It vividly illustrates how – – and I’ll use an Elliott Wave Theory term here – – batshit insane the market has become.
The x-axis is the dividend yield. The y-axis is the price/book ratio. During sane times (1927 through 1988), almost every single market year was neatly contained within the rectangle shown.
Since 1988, however, in the post-Alan-Greenspan era, all the dots have been in la-la land. Most interesting of all, the market year we just closed out was beyond Jupiter, beyond Greenspan’s Uranus, beyond Pluto, and way out into the Oort cloud. Even the cocaine-and-heroin-fueled 2021 pales in comparison to where we are at now.
I can only shake my head. The world isn’t just insane. It is in a state for which a word doesn’t even exist yet.
