Are Markets Overbought, Oversold Or Fairly Valued

CFA General
#1

I’ve heard all three from various pundits, managers, analysts, journalist and economist. I have not had time to do my own homework, so I can’t really say with any conviction. However, I would assume were not overbought. Whether or not were oversold is questionable and probably sector/name dependent. With respect to being fairly valued, well, I guess that’s questionable too. What do you think, and why?

#2

I think it depends from the sector, the company value and the country in which the company trade. In my opinion, it is tooo generic to consider the whole market

#3

I’d have to think about it more to develop a more nuanced view, and I agree with strangedays. I think panic has taken down a lot of good companies with the bad, and so the trick is how to sort through the rubble.

#4

In any market you are going to get all three answers. Big money is generally the ones setting prices and every transaction is two sided. So two smart, hardworking managers (maybe CFAs) have differing views on the same stock or option or whatever. Of course only one is the correct answer, but it is pretty hard to figure it out most of the time.

#5

One thing for sure is that the market is extremely volatile now.

#6

Overbought… recessions don’t happen in a month… It doesn’t work that way…

#7

Isn’t it possible that the market knows of the recession as has already priced it with the close to 50% drop?

#8

ymc Wrote: ------------------------------------------------------- > One thing for sure is that the market is extremely > volatile now. Good observation YMC.

#9

Definitely grossly overbought.

#10

PtrainerNY Wrote: ------------------------------------------------------- > Overbought… recessions don’t happen in a > month… It doesn’t work that way… Actually, stocks in general are undervalued on a historical basis. Do you actually do any research when coming to your false conclusions, or do you just take a wild guess?

#11

overbought and oversold and extremely short term phenomena. “Fairly valued” is really a separate concept. It can be overbought and undervalued, or oversold and overvalued.