Valuations Still Matter?

While sometimes (in fact, in the last decade or so - most of time) it looks like valuations do not matter, however, James Montier's latest note "In Defense of the "Old Always"" tells you among other things, available free of registration also here, using the words of Benjamin Graham:

"... But if my cliché is sound – and a cliché’s only excuse, I suppose, is that it is sound – then the stock market will continue to be essentially what it always was in the past – a place where a big bull market is inevitably followed by a big bear market. In other words, a place where today’s free lunches are paid for doubly tomorrow. In the light of experience, I think the present level of the stock market is an extremely dangerous one."