Back in 2011, David Leonhardt wrote a New York Times article headlined "Stocks Are Still Expensive" that reported stocks "are fairly expensive right now relative to earnings." He reported that "stocks would have to fall another 6 percent from their current level to return to the 50-year average."
I called attention to that article back in 2012, writing, "the next time he makes a stock market call, you may want to take it with caution." If you had read Leonhardt in 2011 and decided stocks were too expensive, you would have missed out on the 57 percent gain in the Standard and Poor's 500 Index that has happened since he wrote that 2011 "Stocks Are Still Expensive" article.
Now Mr. Leonhardt is back to his old tricks, with an article in today's Times headlined "Time To Worry About Stock Market Bubbles." It's an expanded version of the same story he wrote back in 2011, mentioning the same authorities — Robert Shiller of Yale, Benjamin Graham, Warren Buffett, David Dodd. He reports, "Based on history, stocks look either very expensive or somewhat expensive right now."
Well, they looked expensive to Mr. Leonhardt back in August of 2011, and since then they've gone up another 57 percent!
If he keeps writing this column over and over again, he may eventually be right, but to a reader it's useful more as entertainment than as a guide for allocating capital.