In our market outlook, we showed the market as a whole is more expensive than it’s been at any point since before the ’08 recession. We may not be in tech bubble territory yet, but there are many “micro-bubbles” throughout the market where individual security valuations have become disconnected from cash flows.

However, the existence of micro-bubbles doesn’t mean that every part of the market is overvalued. In fact, there are also micro-bubble winners or pockets of securities that are undervalued based on overblown fears of disruption. At times, entire industries, not just one or two stocks, can look like a micro-bubble winner.

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