Are we close to the beginning of an upswing, or in the late stages? If a particular cycle has been rising for a while, has it gone so far that we’re now in dangerous territory? Does investors’ behavior suggest they’re being driven by greed or by fear? Do they seem appropriately risk-averse or foolishly risk-tolerant? Is the market overheated (and overpriced), or is it frigid (and thus cheap) because of what’s been going on cyclically? Taken together, does our current position in the cycle imply that we should emphasize defensiveness or aggressiveness?
