We're in the third-biggest stock bubble in U.S. history, according to long-term historical data cited by MarketWatch columnist Brett Arends.

What’s worse, some of the worst previous bubbles ushered in periods of terrible returns for up to 30 years, a lifetime of investing for many people.

Editor’s Note: Retire 10 Years Earlier With These 4 Stocks

“Forget ‘stocks for the long run,’ ” Arends wrote. “They ended up with ‘stocks for a long face.’ The bigger the bubble, the worse returns.”

Andrew Smithers, chairman of Smithers & Co., issued one of the expert warnings about the bubble of the late 1990s that was mostly ignored by investors until it was too late. Smithers used U.S. market data going back to 1802 to find that until now, there were only five times when stocks were more than 50 percent overvalued: 1853, 1906, 1929, 1969 and 1999. By his measures, in 2014 stocks are so far 80 percent overvalued, and only 1929 and 1999 were more overvalued.

Smithers’ data looks at how much it would cost to replace corporations’ assets from scratch, a calculation known as “Tobin’s q,” in relation to subsequent 30-year returns on stocks.

“The two measures march closely together: For over 100 years, nothing has predicted investors’ future 30-year returns better than to compare the stock market to the q,” said Arends.

Smithers predicts stock prices are first likely to go up even more before the end comes, because of the Federal Reserve's ultra-loose monetary policy and because corporations have been buying up their own shares at artificially low interest rates.

Arends said he gives Smithers’ analysis a lot of respect. “It is, after all, based on hard numbers, unsentimental analysis, and a deep study of history. All three are in short supply elsewhere on Wall Street.”

USA Today is skeptical of the bubble talk among financial pundits. The newspaper noted asset bubbles are characterized by frenzied purchases, which is not what’s happening with equities now.

Stock exchange volumes are way down, and so are sales and purchases of mutual funds.

“Stock prices are relatively high vs. earnings, although nowhere near as high as they were during the technology bubble. Stock prices are about the same, relative to earnings, as they were in October 2007. But that wasn’t a stock bubble. It was a real estate bubble,” USA Today said.

Editor’s Note: Retire 10 Years Earlier With These 4 Stocks

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