When astronomers look at any galaxy and applied Newtons laws of physics, they couldn't understand why the galaxies weren't flying apart. The realization that something unseen must be at work leads to one of the most exciting discoveries in cosmology in history. It turns out that there must be what is called "Dark Matter" that accounts for the missing gravity that keeps galaxies intact. We basically backed out how much there must be from simple equations of motion. I did something similar in my model. If I put in by hand my "missing financial dark matter" that is holding the SPX at these levels, and then applied my equations forward, it comes back with a "FV" of about 1300 on the nose. I still don't understand what this "financial dark matter" is. I thought I knew but the market is ignoring my theory. Without it, the model thinks SPX is FV at 1250. FWIW.
Maybe you are missing what's analogous to a cosmological constant. In your case, it would be 1317 / 1250 = 1.0536
How can there possibly be any such thing as "fair value" to that level of precision? For example, a fall in the earnings yield from 9% to 7%, hardly an irrational or tectonic shift in return expectations, would result in a 28.5% increase in the price of a stock market. Then there is the fundamental unpredictability of the future, which can easily mean earnings rise or fall more than expected. You can never say that the fair value of something is X. You can only give a potential value range, based on a floor at which the asset is objectively cheap, and a ceiling above which it is objectively overvalued. Those value ranges are so wide for almost all assets, that they are utterly irrelevant for trading purposes.
How on earth do you know that the market is irrational? You have provided no evidence to back that up. This is not 2000, where the S&P had an earnings yield of 3% and treasuries with almost no risk were yielding double that. The only hubris being demonstrated here is by yourself, making controversial claims without even the slightest supporting facts or reasoning to justify them. Who cares what you "think" something is worth? An opinion is not reality. Why is google worth no more than $400 per share, perhaps you could try to justify that claim with some facts and reasoning? Ditto for CME. Without any evidence to back up these claims, your accusation that people are operating on the greater fool theory is just nonsense upon stilts. You can't just throw out claims like that without proving them to be true, or at least making them convincing by giving credible explanations, some demonstrable axioms and a chain of logical reasoning to lead to your conclusions. At the moment you are just arm-waving. An assertion is not an argument. I don't know why you are hypocritically accusing others of being stupid. You are acting the stupid one here, making utterly illogical and irrational claims, failing to use basic reasoning, not thinking critically about your deeply flawed and naive axioms, having giant gaps in your knowledge of investment and valuation theory, the list of mistakes and blunders goes on. You can't hope to improve if you stubbornly refuse to examine the possible flaws in your thought process, which many people have generously pointed out to you. After 450 pages you show less signs of adapting than the dodo, and your account balance will head the same way unless you quit playing the spoiled asperger's boy.