I know enough to know that I don’t understand stock pricing, other than looking at what has happened in the past and saying “hopefully something similar will happen in the future”. I’m not sure anyone, other than possibly Jim Simons and crew at Renaissance Technologies, does. [b]I’m quite certain all the talking heads have nothing useful to offer.[/b]
 
So, I keep going with my Boglehead-ish approach, plus a couple of local investments where I have some actual input, and can understand the details. Whether or not an investment makes sense is much more easily understood in that situation.
 
But I do find some of the arguments that certain stock prices are bubbly, including *certain* indices (not all), pretty compelling. And the proposed psychology behind it makes sense to me. Not that I’m doing anything about it other than being somewhat concerned.
 
For example, the S&P P/E ratio was ~13 from 1900 to 1980, and ~22 since. Now, perma-bears have been saying it would regress to 13 forever, and have missed out on decades of gains. Academic economists come up with all sorts of pseudo-explanations for the change, with speculation about whether or not it will continue. Nothing I’ve read strikes me as any more convincing than simple psychology: The S&P has done very well over most living investors’ lifetimes. We believe it will continue to do well, and so we continue to put our money there. I do believe that’s a significant component of S&P pricing.