Commodity Futures News Registration Customer Service Investors Network Home Page 10,000 Mania by David Fried, Author of The Buyback Letter Investor sentiment is actually lower than I would have guessed given the markets recent performance. Overall valuations remain very high for big-cap stocks and are the lone negative in our market monitor. The low interest rate environment coupled with the low inflation rate continue to provide support for the stock market while earnings continue to provide more upside than downside surprises.
Conventional wisdom says that the market is very overvalued.
However, the overvaluation is concentrated in the popular big cap stocks which just seem to go higher and higher. We all know that trees don't grow to the sky. What is starting to become recognized, and talked about, is the fact that the great majority of stocks are not matching the performance of the market indexes. At some point money managers will have to put money to work in stocks with valuations which are justifiable by reality and not hope and hype. When this transition occurs, value based strategies like The Buyback Strategy will deliver incredible performance.