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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?

I think he makes a good point actually. If everything is telling you that the general market is overvalued by nearly 60%, yet you think certain large stocks are undervalued, then you should make sure you can identify other stocks that are obviously overvalued. Otherwise, maybe your logic for your stocks being undervalued is flawed. It's not about discarding the existing methods of identifying overall market overvaluation.

"If you've been in the game 30 minutes and you don't know who the patsy is,you're the patsy." I'd just like to be sure I'm not the patsy.
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