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In Episode 41, we welcome Doug Ramsey from Leuthold. Meb is especially excited about this, as Leuthold publishes his favorite, monthly research piece, the Green Book.\nAfter getting a recap of Doug\u2019s background, Meb dives in. Given that we\u2019re in the Dow\u2019s second longest bull run in history, Meb asks how Doug sees market valuation right now.\nDoug\u2019s response? \u201cWell, that\u2019s a good place to start cause we\u2019ll get the worst news out of the way first...\u201d\nAs will surprise no one, Doug sees high valuations \u2013 believing that trailing earnings-based metrics might actually be underestimating the valuation risk.\nThis prompts Meb to bring up Leuthold\u2019s \u201cdownside risk\u201d tables. In general, they\u2019re showing that we\u2019re about 30% overvalued. Across no measure does it show we\u2019re fairly valued or cheap.\nDoug agrees, but tells us about a little experiment he ran, based on the question \u201cwhat if the S&P were to revert to its all-time high valuation, which was on 3/24/2000?\u201d That would mean our further upside would stretch to about 3,400, and we\u2019re a little under 2,400 today. Doug summarizes by telling us that if this market is destined to melt up, there\u2019s room to run.\nMeb agrees, and makes the point that all investors have to consider the alternate perspective. While most people believe that the markets are substantially overvalued, that doesn\u2019t mean we\u2019re standing on the edge of a drawdown. As we all know, markets can keep rising, defying expectations.\nThe conversation then drifts into the topic of how each bull market has different characteristics. Meb wants to know how Doug would describe the current one. Doug tells us the mania in this bull market has been in safety, low volatility, and dividends. Overall, this cycle has been characterized by fear \u2013 play it conservative.\nThe guys then bounce around across several topics: small cap versus large cap and where these values are now\u2026 sentiment, and what a difference a year makes (Doug says it\u2019s the most optimistic sentiment he\u2019s seen in the last 8 years)\u2026 even \u201cstock market returns relative to the Presidential political party\u201d (historically, democratic Presidents have started office at a valuation of 15.5, leading to average returns of 48%, while republicans have taken over at a valuation of 19, which has dragged returns down to 25%). The bad news? Trump is starting at very high valuations.\nNext, the guys get into the biggest problem with indexing \u2013 market cap weighting. Leuthold looked at what happens to equities once they hit 4% of their index. The result? It becomes incredibly hard to perform going forward. It\u2019s just near impossible to stay up in those rarified market cap tiers. So what\u2019s the takeaway? Well, Doug tell us that he\u2019d bet on the 96% of other stocks in the S&P outperforming Apple over next 10 years.\nThis episode is packed with additional content: foreign stock valuations\u2026 value, momentum, and trend\u2026 the Coppock Curve (with a takeaway that might surprise you \u2013 higher prices are predicted for the next 12-24 months!)\u2026 The best sectors and industries to be in now\u2026 Why 2016 was the 2nd worst year in the past 89 years for momentum\u2026\nFinally, for you listeners who have requested we pin our guests down on more \u201cimplementable\u201d advice, Meb directly asks what allocation Doug would recommend for retail investors right now.\nWhat\u2019s his answer? Find out in Episode 41.\nLearn more about your ad choices. Visit megaphone.fm/adchoices