They may be right. There's nothing to stop stocks from moving higher. But is that the conclusion of a cynical realist, or an apologist for a bull market that's probably "long in the tooth"? A recent Forbes article, citing Standard & Poors' Chief Investment Strategist, Sam Stovall, took the bullish S&P earnings yield case down a peg, noting that "the current rate environment is artificial ... yield levels are lower than during similar historical periods."
One can argue that the stock market is reasonably, even attractively, valued based on certain valuation metrics. However, should the equity market's earnings yield be considered alluring when it towers above a Treasury bond yield that has been "artificially" compressed by central bankers? That's a question that every self-described value investor will have to contend with during the fleeting months of 2013.
At the time of publication the author had no position in any of the stocks mentioned.
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