Every day I have many calls with institutional clients all over the world. Their mandates are quite varied from strategic long-only portfolio managers, hedge funds, and tactical traders. During these exchanges, we have the opportunity to hear what front line investors are thinking, worried about, and what they are buying and selling. I always find speaking with the best and brightest that the industry has to offer incredibly valuable and insightful.

The overall market is NOT extremely overvalued despite some areas showing some exuberant behavior. My research and historical work on valuation multiples continues to show that the most important factors that impact valuation levels are still at all-time favorable readings, which supports the current market P/E.

From time to time, areas of the overall equity market get tactically extended in either direction and can have countertrend price-only moves to work off their respective extremes. What this means in plain English — sometimes stocks in short periods of time can move in ways that are not directly related to their fundamentals. This can appear odd to investors regardless of their experience and if they are either retail or institutional and can cause bad decision making. To avoid this, we use our proprietary earnings rev...

Unlock this article with a FREE 30-Day Trial!

An FSI Pro, or FSI Macro subscription is required in order to access this content.

*Free trial available only on a monthly plan

Disclosures (show)

Get invaluable analysis of the market and stocks. Cancel at any time. Start Free Trial

Articles Read 2/2

🎁 Unlock 1 extra article by joining our Community!

You’ve reached your limit of 2 free monthly articles. Please enter your email to unlock 1 more articles.

Already have an account? Sign In

Don't Miss Out
First Month Free