Stocks VS Bonds

DYI:  When changes in valuations become so absurd changes in asset allocation from the value players is ignored by the crowd as they continue purchasing overvalued assets (currently stocks).  The crowd today is totally fixated that stocks will always deliver their magical 10% return forever and yet has long since forgotten that bonds out performed stocks from the year 2000 till the end of 2009!   

Warren Buffett’s Berkshire Hathaway pulled in currently $360 billion in Treasury bills and notes (31%) the highest ever in its corporate history.  Completely ignored (except value players) by the crowd even the so called professionals we are suppose to bow to their expertise maintain a high percentage level in stocks!    

Today 3-31-2026 the Stock to Bond Index almost reached a 2 to 1 level that is far and above 1929, 1966, and the year 2000!  This is a scorching difference between the S&P 500 dividend yields of 1.09% as compared to long term corporate bonds yielding 5.90%!  Along with the S&P 500 Shiller PE remaining at the nose bleed level of 36.53 thus placing a governor for any upside potential.  Simply put the compounding effect – despite any interest rate gyrations – over the next ten years it is now highly likely corporate bonds will outperform stocks until valuations justify purchasing stocks.