Are there more undervalued stocks in the bull market or bear market?

Happy Christmas, everyone! As I am just trying to learn more about market, hope someone can help answer my first posted question.

Question:

Are there more undervalued stocks in the bull market or bear market? I am not sure if there is a direct answer but just curious to see if there is any data on this.

Thanks a lot in advance!

Comments (5)

Dec 25, 2018

Beginer Investor, sorry about the lack of response. Maybe one of these topics will help:

  • Bulls vs. Bears in 2018 managers are ready for a downturn, even though they think there is still some room for the market to rise: ... you think? Are stocks as overpriced as people say or are some still undervalued? Also, do you think ... Stocks are at an all-time high and many people are saying that they are becomi
  • What's better? Starting a career in S&T in Bull Market or Bear Market a better long-term career path? 1) Join as Analyist at start of bear market. Volume is low, profit is ... The question say it all. Just to fill in my curioisity. Which of the opposite extremes provide ... bull market. Volume is high, you make easy money, but as someone said earlier it's hard not to ...
  • A Contrarian View- Raging Bull you invest in stocks when the potential returns are so low? Counterpoint: Actually, with earnings ... with meaningfully higher potential returns than stocks for the next several years. in other words, ... optimism and it makes me think we're on the cusp of a secular bull market. allow me to present some
  • Bear Market 2014/2015 Since bottoming out in march 2009 the stock market has more than doubled in less than 5 years. ... in the stock market have been a fools rally with no fundamentals behind them. The market is way ... quarter, but the market can't go up forever. And when i
  • Is the Bull-Market Over? the bank stocks because hedge-funds, and quant boys are supposedly "shifting their money." ... fast afternoon. I have no hope in these markets anymore. Now, everyone is running around chasing all ... Watch tomorrow the huge dump in the irrational run up in financials. This was a nice year, but the huge ...
  • Ebola virus ends the bull market? I don't want to sound like a fear-mongerer or anything, but there are some signs that the ... further lives, potentially millions? Will this rock the stock market? ebola ... contraction the U.S. experienced in the first quarter due to an unusually cold winter could greatly pale in ...
  • Breaking into buy-side equity research- my experience trying to close the next deal. The market is the ultimate determinant of whether you are correct in the ... idea? Is there more focus on breadth or depth? Are people siloed in their industry coverage or is there ... are afraid the interviewer could conceivabl
  • More suggestions...

Fingers crossed that one of those helps you.

Dec 29, 2018

There's not really a black and white answer, it depends where you are in the cycle. If you're in a bear market but it's been going on for a long time and everybody in the market thinks the market will keep going down forever, that is usually an easier time to find undervalued stocks than say the peak of a 9 year bull market such as earlier this year. I don't know if there are any statistics on this specifically, that would be pretty hard to quantify. It has been proven that if you buy stocks trading at lower P/E multiples your return will on average (I don't remember the time horizon for the returns but I think it was 1 year) be better than buying them at high multiples, and most stocks will trade at lower multiples in a bear market.

Jan 2, 2019

Depends on the drivers as well. It's easy to think a bear market will be more undervalued since prices are dropping but if they're dropping because the overall economy is in a recession then it's likely that earnings, or at least revenue, is falling in tune to the price. So this means valuations are going to be flatter. Likewise, an exuberant run up like the late 90s or 1920s means only prices are rising instead of the slow buildup, like post WW2, where the economy was growing naturally.

To be honest, I like Shkreli's view that out of 10 companies 1 is over, 1 is under, the rest are even. Obviously it's a bit of an extreme example and "even" could mean within +/-20% which for some people is worthwhile and others not, but it gets the idea across.

Hoping for hedge life.

Jan 9, 2019

What about when the stock market enters a downturn but the economic fundamentals remain strong?

Jan 5, 2019
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