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Opinion
John Authers

Really, Truly, Holistically, the Stock Market Is Expensive

A fresh attempt to redesign the flawed mechanics of equity valuation still suggests the U.S. is as pricey as it was in 1929.

The mechanics of valuation may be outdated and flawed. That doesn’t make equities cheap.

The mechanics of valuation may be outdated and flawed. That doesn’t make equities cheap.

Photographer: Hulton Archive/Archive Photos/Getty Images

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Armistice Day, or Veterans Day, is a great time to pause and take stock. The U.S. Treasury market closes for the day, so there’s no risk of hurly burley over inflation and monetary policy. It’s a good opportunity to get out of the short term and look at the very long term, through the lens of one of the most ambitious pieces of research I’ve ever seen. Jacques Cesar of the consultancy Oliver Wyman has spent the last five years working out an alternative to the capital asset pricing model, or CAPM, and he thinks he's delivered.