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If you think a DOW component (e.g IBM) is overvalued at $209, then evaluate if the fair value with a 60% drop is $83 is OK. If this makes sense to you then the market is indeed overvalued significantly. In this context assume normal GDP growth (~2-3%) . Now IBM is an example. You can take any of the 50 DOW components.

Yeah, but there are already ways to evaluate if the market is overvalued:

1. Total market/GNP (this one endorsed by Buffett).
2. Ten year P/E.
3. Q

Curiously, all these methods seem to be in agreement!

You are saying "toss those time-tested statistical methods and just do a gut feel check on IBM". Why?
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