Free Republic

"Dow Industrials plunge more than 1,100, the biggest one-day point drop ever..." was a headline after the market closed today.  Why lead with the point decline and not the percentage decline? A 4% drop isn't nearly as alarming, and you might be less inclined to click on the headline.On a day in October of 1987, the Dow dropped 23% -- about 6x as much as today's decline.  Almost a quarter of stock market value was temporarily wiped out in about eight hours.  That was a loss of 508 points.  If we had only experienced the percent loss at that time...

The U.S. stock market is extremely overvalued by almost any measure.I know that pointing this out is raining on the bull market’s parade, with the rest of Wall Street giddy over the Dow Jones Industrial Average DJIA, +0.88%climbing its latest 1,000 points in record time, and erstwhile bear Jeremy Grantham of Boston-based investment firm GMO warning of a possible “melt up” for the market.But valuations do matter, sooner or later. And it’s a key feature of investors’ psychology at bull market tops to ignore valuations. So this column is important precisely to the extent you’re likely to dismiss it. Dennis...