The risk premium today, March 29th, is 6.29%. In March 2000, at the Tech Bubble peak, the risk premium was -2.07%. That month Robert Shiller published Irrational Exuberance which showed that the S&P 500 was the most overvalued since 1929. The future is unknown regarding the future of COVID-19, oil prices and the market; however, there appears to be a contagion of panicked concerns regarding the current state of the economy, markets and COVID-19 that we are in a state of Irrational Pessimism.
The risk premium objectively compares the valuation of bonds versus stocks. It