What to Do with Small Caps?

Readers know about my concerns with overall valuation of US stocks as well as high yield in particular.  What else am I concerned about?  Small Caps.  First is a chart on the historic run of small caps from WisdomTree, then a chart from the amazing Green Book from Leuthold that lays out the valuation argument against small caps relative to the overall market.  

chart29

 

leu