On My Radar: Mr. Rogers’ 10-Seconds

September 4, 2026
By Steve Blumenthal

“Listening is where love begins: listening to ourselves and then to our neighbors.”

— Fred Rogers

Grab your coffee, find your favorite chair — today's post is a quick one. You'll find two of my favorite valuation charts, and I'll walk you through how to read them in plain English. Bond yields are also climbing across the globe, worth watching as we head into September and October, historically the market's two toughest months. Buckle up.

There was also an apparent massive intervention this week to push the yen higher. More on that below, and what it could mean for the yen carry trade.

Valuations and Forward Returns
Several Interesting Charts
The Great Powers Index - Ray Dalio
Trade Signals: September 3, 2026
Personal Note: Mr. Rogers’ 10-Seconds
OMR is for informational and educational purposes only. No consideration is given to your specific investment needs, objectives, or tolerances.
Please see the Important Disclosures at the bottom of this page. Reminder: This is not a recommendation to buy or sell any security. My views may change at any time. The information is for discussion and educational purposes only.

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Valuations and Forward Returns

We’ll take a broader look at current valuations and what that may mean for future returns after quarter-end. Today, let’s look at two.

S&P 500 Index Trend Channel Chart

First, some general understanding: History doesn’t repeat exactly, but markets often follow similar patterns. Looking at those past patterns can help us understand where we may be in a long-term market cycle.

The first chart (S7) shows the S&P 500 going all the way back to early 1928. The two long-term trend lines create a broad “channel” that has historically marked the market's upper and lower boundaries.

Think of the channel as guardrails. When the S&P 500 approaches the upper boundary, the market has historically been expensive and potentially overextended. When it falls toward or below the lower boundary, stocks have generally been inexpensive and potentially oversold. As the letters on the chart show, some of the market’s biggest valuation extremes occurred near these boundaries.

The takeaway is simple: where the market sits within its long-term historical range can provide useful perspective on whether stocks may be unusually expensive, unusually cheap, or somewhere in between.

Here’s how to view the chart:

This analysis looks at three popular valuation metrics: Price to Book (P/B), Price to Dividend (P/D), and Price to Earnings (P/E)
The middle section (peach color) plots the long-term trend channel and arrows to prior cyclical trend high points and low points.
The bottom-right plot shows the various valuation levels at the high and low dates. Note that there have been eight “high” points dating back to 1928.
Next, compare the current state (see the red "We are here" box) to the prior high points plotted bottom right.
- P/B - Record high: No other prior period was higher. The closest was a 5.0 price-to-book in March 2000.
- P/D - Record high: No other prior period was higher. The closest was an 89.4x price-to-dividend in March 2000.
- P/E - The current reading is 25.6. It was 27.8 in March 2000.

One thing worth sitting with: P/B and P/D are at record highs, but P/E, at 25.6, isn't quite there yet (27.8 in March 2000). That gap matters. It's largely a function of record-high profit margins inflating the "E" in the ratio, which makes the market look less stretched on that one metric than it actually is on the others. Don't let it lull you — margins mean-revert too.

Stock Market Cap to Gross Domestic Income

This next chart compares the total value of the U.S. stock market with the size of the U.S. economy, as measured by Gross Domestic Income (GDI). Simply put, it asks: Are stock prices expensive or cheap relative to the income generated by the economy?

The dashed lines identify historically overvalued and undervalued zones. The table at the bottom shows how stocks have performed in the years following similar valuation levels.

Historically, major market peaks have tended to occur when valuations were in the overvalued zone, while major market bottoms have tended to occur when valuations were in the undervalued zone.

No valuation measure is perfect. The economy and stock market have changed over time, including the mix of public and private companies and the growing importance of overseas revenues. Still, comparing the value of the entire stock market with the income generated by the economy provides a useful big-picture measure that is less dependent on accounting methods or changes in the makeup of individual stock indexes.

I view this chart as a valuable long-term guide to market valuation, prospective returns, and risk.

Here is how to read the chart:

The lower data box plots the S&P 500 Index returns 1-, 3-, 5-, 7-, 9-, and 11-years later.
The yellow box with the “We are here” arrow shows our current state. The green arrow shows we’d be “Better here.”
The takeaway: you want your entry point somewhere between the two extremes, and we're not there yet.

My take: There are real opportunities. I like energy, US infrastructure, high- and growing-dividend-paying stocks (companies with high free cash flow and low outstanding corporate debt), robotics, quantum computing, metals and miners, agriculture, and AI (to name a few categories). Add to positions in periods of market dislocation (forced leverage-unwinding environments).

I disfavor cap-weighted indices, as indicated by the charts above, and long-duration fixed-income bond investments. I see major cracks in the foundation, all tied to the late stage of the debt super cycle, with particular focus on the risk in the yen carry trade and rising interest rates across developed-world debt markets.

Opinions are subject to change. Not a recommendation to buy or sell any security. Provided for discussion and educational purposes only.

Several Interesting Charts

Next is a look at the 10-year Japanese Treasury Yield at the 3% level.

Remember when an investor could borrow at less than 1% and use the proceeds to buy other, higher-yielding investments. That’s the yen-carry trade, and the risk of it unwinding increases as the cost of borrowing goes up.

Next is a quick look at this week's apparent intervention aimed at pushing the yen higher.

Note the two price spikes higher in the last six weeks.
The yellow-highlighted bar is this week’s price action.

Here's why this matters beyond the chart: a narrowing rate gap is what funds the carry trade in the first place, and intervention like this is one way that gap closes. When the carry trade unwinds, it doesn't stay contained to Japan — August 2024 was a preview of how quickly that stress can spread to global risk assets. Worth watching closely as we move through a seasonally rough stretch for markets.

Dalio: What Ray is pointing out is what is happening in real time. And the heat in the kitchen is rising, as shown in the yield charts above.

The coming “reset” is about the restructuring of the dollar. You want to own assets that may benefit (hard assets, select equities, gold, commodities, and likely crypto, to name a few) and avoid those that may devalue (fixed-rate bonds and anything that may not keep pace with inflation). Not a recommendation for you to do anything. Please speak with your advisor.

Opinions are subject to change. Not a recommendation to buy or sell any security. Provided for discussion and educational purposes only.

The Great Powers Index - Ray Dalio

Ray's latest is worth reading in full, but the short version: he sees the U.S. facing a genuine test of its power on the world stage, comparable to Britain's Suez moment, this time over the Strait of Hormuz and Iran.

From Ray: “To me, it seems obvious that we are now seeing a classic big test of the world’s leading great power (the U.S.) that is analogous to the test the British Empire faced (and failed) when the Egyptians seized the Suez Canal from them. With the U.S. publicly threatening all the world’s nations with sanctions if they don’t go along with the U.S. plan to starve Iran into allowing free passage through the Strait of Hormuz, countries will now have to decide either a) to go along with the U.S. plan, which would be a great and obvious success for the U.S. if most countries go along and it works, or b) to defy the U.S. threats and plan and allow the Strait of Hormuz to remain under Iranian control, which would be a great and obvious failure for the U.S. While we can each have our own views of the odds of either outcome coming about, we can simply wait and find out which one happens. It will also be informative to see which countries join the U.S. plan, which ones don’t, and what the U.S. does about those that don’t.

Thus far, China and Pakistan have made clear that they won’t go along with the U.S., so it will be interesting to see if the U.S. follows through with its threats or will be caught bluffing. The U.A.E. has made it clear that it will go along with the U.S. Other countries have thus far remained silent or have been ambiguous. They can do so for a few days but will soon have to make their decisions clear.

Also notable, CIA Director John Ratcliffe made an unannounced visit to Moscow on August 25 and met with his Russian intelligence counterpart while other important negotiations are simultaneously and quietly going on. Supposedly, the most important purposes of the visit were 1) to deliver a warning to Putin not to act against NATO allies in Europe or against U.S. interests in dealing with Iran or not to significantly escalate the Ukraine war and 2) to explore whether Russia is receptive to doing a deal that would encompass both Ukraine and Iran, while China is quietly influencing from behind the scenes.

While these are the immediate particular issues now at hand that are transpiring for these particular countries, it seems to me that the arc of what is happening is a very classic great-powers conflict that is being driven by very classic Big Cycle changes in relative monetary, domestic political, international geopolitical, and technological powers of the big players in this drama—and, of course, the intellectual powers of the players to play the hands that they have been dealt wisely. Because the strengths of all these powers and how their relative strengths are changing can be measured, they can be followed, which is helpful in figuring out what is happening and what is likely to happen. For a complete review with measurements of past cases over the last 500 years, I refer you to my book Principles for Dealing with the Changing World Order, and, for updates on my most important power indicators, I refer you to my online Great Powers Index.

As always, I welcome exchanges of thoughts about what is happening and what to do about it.” Source: Ray Dalio, Substack

SB here: Each week I update a dashboard of my favorite indicators in Trade Signals. It helps me stay in tune with the current market fundamentals and technicals. Ray has created a sort of geopolitical dashboard called the Great Powers Index. If you have a minute, I recommend you click on the Great Powers Index

I’ll be tracking it more regularly in my own work.

Opinions are subject to change. Not a recommendation to buy or sell any security. Provided for discussion and educational purposes only.

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Trade Signals: September 3, 2026 Update

Trade Signals

The Indicators Dashboard - Stocks, Investor Sentiment, Bonds, Commodities, Currencies, and Gold
Valuations and Subsequent 10-year Returns
Supporting Charts with Explanations

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Personal Note: Mr. Rogers’ 10-Seconds

“In 1997, Fred Rogers walked onstage at Radio City Music Hall to accept a Lifetime Achievement Award at the Daytime Emmys. Tim Robbins introduced him as "the best neighbor any of us has ever had." Rogers didn't take a victory lap, though.

He asked the room for ten seconds of silence, to think of "the people who have helped you become who you are, those who have cared about you and wanted what was best for you in life." Then he said, "I'll watch the time," lifted his wrist, and watched it. Ten seconds, live, in front of an audience of actors, producers, and soap opera stars, an audience not known for sitting still. By the time he looked up, people were crying.”

Source: YouTube, CLICK ON THE VIDEO TO WATCH

“In a place full of people conditioned to fill silence with applause, jokes, or the next cue, it was a pretty novel act. Rogers held the moment, at the cost of his own airtime, and let the silence, the reflection, do the work he couldn't do with words alone.

As leaders, we might sometimes spend people's attention without a second thought: a quick update, a distracted one-on-one, or a meeting that runs long because nobody wanted to be the one to stop it. Every one of those moments is borrowed from someone's finite ten seconds. Rogers knew that how you spend someone's time is itself a message about how much you value them, regardless of what you say while you're doing it.

Let’s ask ourselves:

When was the last time you gave someone your undivided attention for a full, uninterrupted moment, no phone, no next-meeting math running in your head?
Which routine moments on your calendar- a check-in, a recognition, a hard conversation- are you currently rushing past?
If your team described how you spend attention in a room, would "present" be the word they'd use?

The lesson we can learn from Mr. Rogers’ 10-second pause is all about how wisdom is knowing which moments deserve the full ten seconds, and giving it to them rather than rushing through on the way to the next thing on the agenda.”

The above is from The Daily Coach. I don’t read every email they send, but this one caught my eye. Subscribe for free here and get daily emails like the above directly in your inbox.

A quick soccer update:

Last night, Coach Sue's Malvern Prep Friars won their season opener, 2-0. A new season, and a fun one to watch — a few new faces on the team gave us more than a few pleasant surprises. (For new readers, Coach Sue is my wife, Susan.)

Afterward, Susan and I stopped at The Pour House for shrimp tacos and an Other Half IPA — a Brooklyn brewery, highly recommend. A cold beer always tastes better after a win. We ended up sitting there longer than we needed to, just talking through the game, no phones on the table. I didn't think anything of it at the time. It wasn't until I sat down to write this note to you that I recognized what it actually was: a small version of Rogers' ten seconds. Nothing was pulling at either of us. We just let it be about the game.

I'd like more of those. With the boys on Sue's team. With my team at CMG. With Susan and our children. Mr. Rogers’ lesson isn't complicated; it's just sometimes easy to forget. I can be better.

Wishing you a wonderful long holiday weekend, some great food, a cold IPA (or your favorite beverage), and a Mr. Rogers’ moment with those you hold closest to your heart.

With kind regards,

Steve

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Stephen B. Blumenthal
Executive Chairman & CIO
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Stephen Blumenthal founded CMG Capital Management Group in 1992 and serves today as its Executive Chairman and CIO. Steve authors a free weekly e-letter entitled, “On My Radar.” Steve shares his views on macroeconomic research, valuations, portfolio construction, asset allocation and risk management. Author of Forbes Book: On My Radar, Navigating Stock Market Cycles.

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