By Roman Chuyan, CFA I show (again) that the stock market valuation is at its highest in at least 150 years. However, reason doesn’t apply in a bubble; instead, crowd mentality is in charge. What might trigger a turn in the market? I think inflation and rising rates are inevitable. Stocks have continued to rise in April, taking the market to an even more-extreme valuation. While the S&P 500 reached an all-time high, corporate earnings haven’t rebounded from their early-2020 plunge, and in fact continued to decline through Q4-2020 (the latest final EPS available). These trends have brought valuation ratios to an extreme. In its 150-year history, Shiller’s cyclically adjusted P/E ratio, at 37, has been higher only in 1999-2000: