I made some quick and dirty calculations on a paper napkin regarding the recent historical valuations of SP500 and found interesting conclusions: A. 3/31/95 till 06/30/99 Stock valuation increases like crazy. Earning also increases but at a slower pace. (Greed) B. 9/30/99 till 09/30/01 Fair Valuation remained although trailing earning deteriorated C. 12/31/02 till 06/30/07 Valuation increased in step with the earning increase. D. 09/30/07 till 03/31/08 Valuation decreases but slower than the earning declines. (Hopeful but get punished)   Well, I suppose we haven't come even close to the definition of a FEARFUL period yet. We had certainly gone through a Greed period and couple of Hopeful periods in the last ten years. However, are we going to see FEARFUL market valuation in the near future? I do not know. There is an increasing probability of course given by the gigantic problems US economy is facing right now.   One of the key will be how that the market participants especially FED and Treasury react to this crisis. Certainly, there will an opportunity of a LIFE TIME coming soon into the horizon. However, no matter in whatever period or era, there are always some good companies out there whose prices are trading at a valuation low enough to offer investors' sensible risk and reward ratios.