IMHO the stock market, like housing, is not priced by value but rather by emotion and speculation. As only 1 in 7 Americans believe the housing market will go down, they are also extremely optimistic about stocks which keeps them buying which keeps the price up. Especially now, with the prevalence of internet trading, any one can buy and sell with a mouse click, and most people are truly uninformed about stock fundamentals. When I visit a stock broker or financial investor who talks to me about fundamentals, I feel like he’s been in the dark for some time. Warren Buffet strategies don’t work in a world of Homer Simpson traders. It is clear from the last sell-off which was sparked by a little government intervention in China. You are right to be bearish, I’ve moved 80% of my investments into CDs and the remaining 20% I have in foreign stocks with few ties to the American market.