Why stocks are currently underpriced...
The S&P 500 increased almost straight line by just under 10% per year from 1950 until just before the crash one year ago. Project that increase and the S&P should be at 2000 sometime next year (currently approx 1100).
I've been hearing lots of good reasons why we're due for another huge correction. I almost sold off a bunch of stocks in response, but I decided to wait for the S&P to revert to mean; even if it doesn't happen in 2010.
Of course, I could be wrong, as my current CAPS score shows. Fortunately my real-life portfolio (heavy on AAPL, LFC, HDB, and now BRF) has outperformed the S&P the past decade. Time will tell.