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The Stock Market is 40% Overvalued



October 28, 2009 – Comments (3) | RELATED TICKERS: SPY , GE , MSFT

That's what economist Andrew Smithers wrote in his most recent report to clients. Dismissing this tidbit out of hand could be costly. In Valuing Wall Street, published in March 2000, Smithers warned investors that the U.S. stock market was dramatically overvalued;... [more]


3 Comments – Post Your Own

#1) On October 28, 2009 at 3:28 PM, IBDvalueinvestin (98.36) wrote:

Andrew Smithers may be a smart man but writing that March 2000 was dramatically overvalued did not take a genius. Everyone knew it was over valued back then except for the grandma's & grandpa's that were puting in their retirement money at the tops.

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#2) On October 28, 2009 at 4:58 PM, Varchild2008 (84.15) wrote:

How was March 2000 a top when the market eventually traded much much higher than that?  To DOW 14,000?

easy to predict an extreme short term movement in the market... Try predicting the next 20 years out.

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#3) On October 28, 2009 at 5:07 PM, KamranatUCLA (29.41) wrote:

I agree. Stocks are still 40% overvalued. Show me one stock...JUST 1 STOCK, that makes profit and its market cap is not larger than its assets. It doesn't exsist and the argument investors tell me is that:
"The price is high because they antisipate higher earnings."

I don't give a damn abount anticipations and speculation, that's why I say stocks are 40% overvalued.

Investing in stocks has become a part-time hobby/gambeling for clueless moms and pops and has become like a family hobby and has lost its serious nature since 1987.

If these socccer moms stayed out of this, Dow would be today double what it was in 1987 and would be more around 4000 and not 9000.

But what can you do, every greedy idiot who has a computer and internet thinks he/she can make money and is keeping prices artificially high while the companies behind those stocks make no profit or little profit, or if it makes good profit its price doesn't justify to buy that stock.

anyways. C'est la vie.

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