So the key to understanding where we stand in the cycle depends on two forms of assessment: The first is totally quantitative: gauging valuations. This is an appropriate starting point, for if valuations aren’t out of line with history, the market cycle is unlikely to be highly extended in either direction. And the second is essentially qualitative: awareness of what’s going on around us, and in particular of investor behavior. Importantly, it’s possible to be disciplined even in observing these largely non-quantitative phenomena. The key questions can be boiled down to two: how are things
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