One of my favorite aphorisms is appropriate for the market at this juncture: It's not always right to be right. I've talked to a number of very smart investors throughout this year that have been resolutely short against this relentless rally in equities.

These investors are right, of course, that there are pockets of overvaluation in the market. They're also right that too many stocks with mediocre prospects are selling at 50 times earnings or higher. But that doesn't mean they're correct to bet the market indices will follow their analysis and go to the "right" levels anytime soon.

The rational allocator of capital knows that betting against the market is generally a problematic investment posture, both generically and for this cycle specifically. Here are a few reasons why:

You have to be right on two fronts: valuation and timing. It's not enough to say that Cisco Systems (CSCO - commentary - Cramer's Take), Wal-Mart (WMT - commentary - Cramer's Take) or IBM's (IBM - commentary - Cramer's Take) valuation is stretched. Overvaluation can last many quarters, if not many years.

It's very expensive. Not only do you have transaction costs and slippage, you have to pay margin interest and reimburse your lender of stock for dividends.

The market is up two-thirds of the time, historically. The bears always catch a downdraft eventually, but the odds are against you if you're betting on a decline.

Current investment alternatives to equities are meager. Bonds are more overvalued, in my opinion, than equities. And you'll lose capital, net of taxes and inflation, in short-term instruments, such as three-month T-bills.

Businesses make money or they don't stay in business. To bet against a profitable company is a tough bet to make, since profits continually add to and compound the equity value of a company. When I added to my Liz Claiborne (LIZ - commentary - Cramer's Take) position last fall, for example, I calculated that the free cash flow yield was nearly 8.5%. Compounded, that equates to free cash generation equal to half the company's market value in just five years. Businesses that make money can be overvalued and never decline in value. That's because the business value may eventually catch up to, and then pass, the stock-market value.

We recently exited a once-in-a-generation bear market, the first three-year bear market since Pearl Harbor. To bet that we're about to enter another protracted downturn is to bet on a historic anomaly.

The yield curve remains amazingly steep. As I said in a column late last year, "I can't find a period in the last 100 years during which the economy sank in the face of a steep yield curve (meaning that long rates are much higher than short rates)."