Sometimes I think common sense is something that no one uses when it comes to analyzing markets, making capital allocation decisions, and/or penning market commentary.

There’s a demonstrable tendency for people to get lost in the data or else find themselves blinded by the proverbial light, whether “light” is too much goal seeking on the analytical front or more poignantly, an overriding urge to participate when everyone else is making money even when you know that what everyone is participating in makes little sense.

This is manifesting itself currently on many fronts, not the least of which is the near round-the-clock effort to figure out ways to “explain” why equities are not in fact as expensive as they seem.

Make no mistake, that’s a useful exercise under normal circumstances, because there are always going to be arguments for why something is more or less expensive than it looks and when it comes to allocating capital, you don’t want to be the guy/gal who makes decisions based on the equivalent of a Yahoo Finance screen for a couple of metrics that everyone learns on the first of day of Finance 101.

That said, I think it’s useful to remember that past a certain point, common sense reasserts itself as the only “metric” that should matter even for sophisticated investors with the resources to literally engineer compelling excuses to justify positions in stretched assets.

There is no question that equities are expensive. And this crusade to explain that away by screaming about bonds being even more expensive or worse, about how it’s fine because the companies that are driving benchmarks to new records every other session somehow represent “the future” of humanity and thus cannot be evaluated let alone judged based on traditional analysis, now borders on the absurd.

It goes without saying that you want to compare the attractiveness of one asset versus the attractiveness of alternatives – that’s what capital allocation is. So you are not saying anything new (actually you’re not saying at all) when you claim that stocks have to be evaluated relative to bonds. But it makes little sense to point to a bond market that has been commandeered by a global cabal of policymakers armed with printing presses as a rationale for owning overvalued stocks. That’s like pointing to tulips ca. 1636 as a justification for owning Bitcoin at $8,000 or vice versa (if you had a time machine).