Like It Or Not, Stocks Are Cheap

Summary US equities, in particular, are now reasonably priced after months of earnings growth outpacing price appreciation, compressing forward P/E to 19.1x. Despite macro headwinds (high oil, inflation, and rising rates) SP500 valuations are back below their 5-year average, with robust earnings revisions and double-digit growth expected. Information Technology and 'Magnificent 7' stocks have experienced significant multiple compression, yet earnings growth remains strong, challenging the AI bubble narrative. I maintain a long-term BUY on US equities, as stocks are attractive relative to earnings, recent multiples, and the depreciating currency environment. What happened in Türkiye to local stocks and the local currency resonates and helps explain the trust crisis America is going through. bagi1998/iStock via Getty Images The current macro setup is, to use an understatement, disappointing: oil is hovering around ~$100 per barrel due to two major conflicts directly impacting its supply, U.S. inflation is almost at double its target and the Fed just signaled it may This article was written by Geneva Investor 3.91K Followers Follow I write about Macro and fundamentals, with the (painful) awareness momentum and sentiment are what really matters. That’s why I never try to time the market and I only buy stocks if I am willing to hold them for at least 10 years. When it comes to fundamentals, everybody knows the market is forward looking, but few understand what that means. I don’t look at a P/E number and decide to buy if a stock is “cheap”. I see the market as literally just the meeting point between demand and supply and I always try to understand what it sees in a stock beyond the numbers. This often implies trying to understand sectors, industries and long term growth trends. My approach requires ingenuity, curiosity and a good dose of naivete, as well as being comfortable with (sometimes) going against the current.I am based in Geneva, Switzerland (hence my SA name). Friend "Rex Investing" is also a contributor to Seeking Alpha. All opinions and analysis are exclusively my own.You can follow me on Twitter @ x.com/GenevaInvestor. I am also on medium.com/@genevainvestor. Analyst’s Disclosure: I/we have a beneficial long position in the shares of VOO, QQQM, BTC-USD, GLD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.