I certainly have no interest in trying to call the top of any market cycle. No one has the ability to do that consistently. And if you ever are successful in making such a call, don’t forget that luck was most likely the primary driver. Having said all of that, my understanding of stock market history is that it is near or right at the top when you start to see all kinds of ever more extreme and esoteric rationales for why this time is different and why the market will go up forever.

In the most recent Small Cap Plus quarterly letter, I discussed why I think people should be very skeptical—no matter how compelling the argument—of anyone who makes the claim that value investing is no longer a viable investment strategy or that mean reversion in corporate margins no longer applies in our tech dominated, modern economy. This discussion is particularly timely given the number of parallels between the current period and the waning stages of the late 1990s tech bubble, a bout of market euphoria that definitely did not end well for those who got caught up in it.

You can find the letter here.

– Ben Claremon