“The “Economic Activity Index” is an average of the 4-most essential components of organic economic activity. Interest rates have a long historical correlation to economic activity, along with inflationary pressures. Without productivity and business investment, jobs do not get created to support consumption which is ~70% of the GDP calculation.” However, I want to focus on the valuation component of his thesis and whether stocks are actually “cheap.” Through the first quarter of 2021, the expected economic recovery runs well ahead of what the “economic activity index” approximates. Furthermore, given the market’s advance is based on optimistic expectations, there is potential for disappointment.