The old adage that one should "sell in May and walk away" has been around for years. I mentioned that bromide about this time last year, urging readers to head for the sidelines if they had not already done so. I was also suggesting a strategic retreat in August of 2006 (after which the markets went up 20% before plummeting). In this week's letter we look at the actual data and offer up a fresh viewpoint. Then we turn our eyes to the recent GDP numbers, which were awful, though many took comfort in the apparent rise in consumer spending. Are Americans back to their old ways? It will make for an interesting letter.

My friend and South African business partner Prieur du Plessis recently updated a chart on monthly stock market returns since 1950. It clearly shows that the November through April periods have on average been superior to the May through October half of the year. (To read his very interesting blog you can go to http://www.investmentpostcards.com/)

Is the market overvalued? Fairly valued? Or are there really rocket boosters underneath the trading floors? We will look at the data, some historical charts which I think you will find very interesting, and some of the recent economic numbers which are important, all in an attempt to answer these questions.

This week's letter was prompted by a very fair question from a reader. I got in late Tuesday night to Orlando where I would speak to the Investment Management Consultant's Association the next morning. I went to the bar to get a glass of wine and see if I could meet anyone from the conference and get a feel for what was happening.

Coincidentally, I immediately met two readers who were attending the conference, and we struck up a conversation. One had been reading me for quite awhile and has read my books. It did not take long before he asked, "Do I still believe we are in a secular bear market? And if the market makes new highs, what will happen to my belief in that premise?" As if to underscore that thought, today the Dow closed at 11,577, a six-year high. Various small-cap markets are at actual all-time highs.