"It's getting frothy out there. Pick any stock market metric, whether it's the Nasdaq's closing price or a more technical measure like the Shiller P/E ratio, and the number will look unusually large. Throw in crazy AI valuations, for privately held startups and publicly traded stocks alike, and what we're seeing looks a lot like a bubble. Perhaps this time is different."
"We offer tips on how to play defense in the current stock market (spoiler: Candymakers are a sweet bet for sour times). We also devote some space to stocks that might be best held at arm's length; whatever these companies' ultimate fates might be, these aren't the times or the prices at which to be a buyer. And for optimists, we have a preview of some buzzy rumored IPOs coming next year."
Stock market metrics and valuations are unusually large, with AI-driven exuberance inflating prices for private startups and public companies. Elevated measures across indices and technical ratios create bubble-like conditions, prompting concern for stretched portfolios. Investors are advised to consider rebalancing toward defensive assets, including TIPS, commodities like gold, and consumer staples such as candymakers. Some stocks appear overpriced and may be best avoided at current levels. Rumored IPOs could offer attractively priced entries in choppy markets, as past major companies listed near downturns. Warren Buffett's maxim—be greedy when others are fearful, and fearful when others are greedy—remains a guiding principle.
Read at Fortune
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