I have some good news and some bad news for investors. First the bad news: I think the economic and psychological damage inflicted by the global financial crisis has been so severe that both the US and world economies are likely to be weak for a number of years, making it hard to imagine either corporate earnings or the multiples investors are willing to place on those earnings going up for quite some time.

Thus, in spite of the devastation visited on equity markets over the past year, I would be shocked to see a sustained comeback in overall share prices over the next two to three years.