As for the ubiquitous argument that stock P/E multiples are cheap based on forward-looking earnings estimates, hereto we are skeptical. Indeed, P/E ratios on forward-looking earnings are almost always lower, making stocks look undervalued. That was the case in 2000, 2001, 2002, etc. It is just the nature of Wall Street to overestimate earnings. Yet, the real driver of stock prices is what investors are willing to pay for those earnings, and as we have suggested for the past few years, P/E multiples are compressing due to rising inflation and rising interest rates. And that is why, despite double-digit earnings growth as measured by the S&P 500, stocks have gone nowhere for the past few years. That said, there is always a bull market somewhere and for the past few years we have suggested it was in small/mid-capitalization stocks, “stuff stocks,” Japan, Canada, emerging markets, etc.