This is a new term to me but the underlying common sense of Seth Klarman's comments is unarguable.
The trouble, of course is "When?".
I vividly recall a phone call with a friend of mine who called the dot-com collapse for all the right reasons and was very compelling. Unfortunately, John was two years early. Which made me, on the other side, wrapped up in the Silicon Valley euphoria look like a genius.
Back then, I was not right - just wrong at the right time. In much the same way, if Mr Klarman is not proved right very soon, that will be a cause for greater alarm, not complacency.
“Any year in which the S&P 500 jumps 32 per cent and the Nasdaq 40 per cent while corporate earnings barely increase should be a cause for concern, not for further exuberance,” Mr Klarman wrote. “On almost any metric, the US equity market is historically quite expensive. A sceptic would have to be blind not to see bubbles inflating in junk bond issuance, credit quality, and yields, not to mention the nosebleed stock market valuations of fashionable companies like Netflix and Tesla Motors,”