Albert EdwardsFear of overvaluation – particularly for U.S. equities – has driven far too many investors to miss the strong bull market. For market bears to be proven right, according to Albert Edwards, it will take one or more of several triggers.

Edwards is the global strategist for Societe Generale and is based in London. He spoke at his firm’s annual investment conference in London on July 9. A copy of his slides, as well as those from his colleague Andrew Lapthorne’s presentation, can be found here.

Edwards is not known for providing upbeat forecasts, but he said at the outset that he is not as bearish as usual. “I understand the competitive pressure to participate,” he said, “despite that fact this will go horribly, badly wrong.”

In 1996, Edwards forecast an “ice age” during which bonds would outperform stocks. He based this on his experience observing the Japanese economy, predicting that equity yields would rise as their prices fell, while bond yields would decline.

He noted that the U.S. equity market peaked in 2000, just as Japan did in 1989, and that U.S. stocks are still in a secular downtrend based on cash-flow yield. Edwards said the same thing happened in Japan and it continued for 10 years.

“The ice age is still intact,” he said.