A look at 9 years of recovery; our July 2017 letter

The U.S. equity market continued its 2017 rally in Q2, as the S&P 500’s 2.4% return was easily the best performance among broad-based indices of the world’s developed economies. Based on our estimate of the value of the S&P 500, the index is overpriced somewhere between 25 and 30 percent. Relative value – buying an overpriced stock because it is less overpriced than some other stock – seems a little like a convict celebrating his prison sentence being reduced from 300 years to 200 years.