The stock market cycles from periods of high valuations (whether in terms of P/E ratios or book values) to low valuations and back to high valuations.
The long term P/E average is around 15.
Low valuations mean P/E ratios below 10 and high valuations mean P/E ratios above 22.
In terms of value, the market seems to always want to go to above and below these extremes.
These cycles can last anywhere from 5 to 15 years.
From the Latin word secula for an age or period of time, economists call these cycles either a secular bull market (when the market is going up) and secular bear market (when the market is going down).
Looking at the record of history, we can see that once a new cycle has begun at one extreme the market will go to the other extreme.
While there will be many short term bull and bear markets in between, many stops and lunges, eventually the market has always gone from one extreme valuation to the other.