The writer is a philanthropist, investor and economist

The legendary value investor Benjamin Graham once advised: “The habit of relating what is paid to what is offered is an invaluable trait in investment.”

Amid recent record highs in numerous stock market valuation measures, investors face a rare, possibly once-in-a-generation opportunity for the critical thinking that Graham encouraged.

Financial markets and economies are settings where the beliefs of individuals drive behaviours, collectively producing outcomes that then inform beliefs in turn. In the short-run, it may be irrelevant whether these belief systems are well-founded. In the longer run, the question is not optional.

Among the strongest elements of the belief system propping up record valuations and trading debt is the notion that central bank liquidity has the capacity to support elevated valuations indefinitely. Years of intervention have cast…

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