I don't think the stock market is particularly overvalued.

It's clearly trading above the long term average,

but that doesn't necessarily mean that the market is significantly overvalued.

A few points to make.

First and foremost is US equities continue to trade cheap to bonds.

Now you look at the earnings of yields of stocks compared to the treasury yield,

it's not clear that there's an alternative to owning the equity markets.

What worries people is that they remember the late 1990s and they have this recency bias and believe that if the stocks have been going up for this long,

then we must be facing some sort of bubble.

The reality is, if you look at the top 10 names of the NASDAQ stocks in 1999,

the median price to sales was over 20 times.

Today that number on the top 10 names in NASDAQ, the median price of sales is closer to 5 times.

So that's one fourth of the valuations that you had at the height of the tech bubble.

So, yes, stocks are somewhat above their long term average.

That should be expected when the global economy is growing and policies accommodate it.

We're nowhere near that point of significant concern yet.