Fellow valuation worrywarts, rejoice: you can now wallow in a lush, mordant pool of data that shows just how historically overvalued the U.S. markets really are.

From Robert Shiller at Yale comes monthly prices, earnings, and dividends, both nominal and inflation adjusted, back to 1871; this is the data in back of Irrational Exuberance. For example, if you want to blindside your least-favorite new-era paradigmista, just plot inflation-adjusted S&P real dividends for the past 129 years, the slope of which rises at a blistering 1.3% per year:

If he or she can see a productivity-triggered increase in the past few decades, send them to the eye doctor.

And from Andrew Smithers and Steven Wright, authors of Valuing Wall Street, comes Tobin's q (roughly speaking, the market price divided by its replacement value), paired with somewhat less detail on earnings and dividends than from Professor Shiller. Here's the big picture:

Caveat emptor.

Copyright © 2000, William J. Bernstein. All rights reserved.