I don't use the "F" word (fiat) as it's been used too much by the lunatic fringe and I don't think I come across as delighting in the fall of many who were brainwashed by talking heads.
When I get a call from someone who's anguishing over losses or thinking of buying something that is in my opinion overvalued I simply ask them what's the p/e? And calmly explain that 10 times earnings is historically viewed as fairly valued. And then I tell them "If you simply MUST own it why don't you wait until it goes on sale at bla bla bla (whatever the "on sale" price would be). And then I have them look at the dollar. And then I explain that.
Become the New New Spoosman and seek to educate those who have a brain to ask.
You're in a position to help quite a few people. Quite a few people who've been screwed by the powers that be and who would be grateful for your assistance.
(Sorry to post and run for the night...morning comes early here).
That's a great point, d4now. However, the p/e ratio, by itself, excludes the most important factor in stock valuation - earnings growth %.
When I value a stock, the first thing I look at is p/e ratio. Next, I look to see, based on earnings growth % over the past 5 years and expected next 5 years, how long it will take for the "e" to equal the "p." The sooner the better (because of less risk).
For example: ABC trades at $10/share; the p/e ratio is 20/1; the earnings growth is 50%; the stock earnings equal a 1/1 p/e ratio in year 6; and thus the present fair market value of the stock is around $47 (taking the earnings growth over 30 years and discounting it by an estimated 30-year note rate of 5.5% (currently it's actually 5.38%)). I'd buy that stock at $10 (in fact, I'd buy longer term call options on it).