Are the "So Called Experts" Wrong again?

Markets are not Overvalued!

KR Opinion

There is a spirited conversation that many are arguing that the market is overvalued. But take it from me and the WaveTech database: we're looking at things from a different angle. My approach is akin to examining the market through an equal-weighted index lens, which offers a fresh perspective compared to the usual analysis. It’s like comparing the nuanced flavors of an equally weighted S&P index to its more broadly assessed counterpart. I'll walk you through the specifics later, highlighting how sectors are performing and where they stand in terms of maturity and expectations.

Diving deeper, our database, with its impressive roster of 15,000 symbols, suggests that the market might actually be undervalued, contrary to popular Wall Street banter. For example, the equal-weighted S&P trades at 15.3 times forward earnings, a tad lower than its historical average, hinting at a market that's not as overpriced as some might think. My vantage point, honed over 25 years, has consistently unearthed opportunities, even when the consensus was less optimistic.

Last year, our data foresaw a robust mid-year rally, followed by a new cycle beginning in October. This viewpoint challenges the notion that the market is overly inflated. Moreover, the much-discussed "magnificent 7" doesn't hold up when considering our database's broader picture.

Looking ahead, we're eyeing mid-year for clearer signs of market temperament, with mid-cap stocks appearing particularly attractive based on their forward earnings multiples. This year, I believe, will be marked by selective investments, especially in stocks poised to benefit from AI and positive economic trends. This outlook aligns with my longstanding view that a recession is off the table, supported by recent economic indicators.

As we navigate through the coming weeks, with CPI and other economic releases on the horizon, I anticipate a continuation of this positive trend. Despite potential bumps, the path ahead for the markets seems promising as we move beyond mid-February.

Make sure to watch this video for longer Term Viewpoint. Click here to watch!