I’m sure it’s no shock to hear that stocks are expensive right now. But you might be surprised to find out just how expensive they are. Goldman Sachs (NYSE: GS) recently measured the market and found that the median stock trades in the 99th percentile of its historical valuation. Stocks are near historic highs on numerous valuation metrics, including price-to-earnings growth (PEG), enterprise-to-sales and forward price-to-earnings (P/E). You can argue that rock-bottom interest rates make stocks a “relatively” better investment than bonds and other asset types, but that argument sounds a little like every other excuse investors make… Read More
I’m sure it’s no shock to hear that stocks are expensive right now. But you might be surprised to find out just how expensive they are. Goldman Sachs (NYSE: GS) recently measured the market and found that the median stock trades in the 99th percentile of its historical valuation. Stocks are near historic highs on numerous valuation metrics, including price-to-earnings growth (PEG), enterprise-to-sales and forward price-to-earnings (P/E). You can argue that rock-bottom interest rates make stocks a “relatively” better investment than bonds and other asset types, but that argument sounds a little like every other excuse investors make at the height of a market bubble. #-ad_banner-# Investors with long time horizons can shift to cash and wait until the market rolls over, snapping up stocks at better valuations. Traders and shorter-term investors don’t have that luxury. They need to capitalize on weakness and hedge their long holdings. I’ve found a company that may be a perfect candidate for one of my favorite market-hedging strategies. Insiders and an activist hedge fund are unloading millions of this company’s shares, which are trading at a 74% premium to the five-year average… Read More