There are a lot of stocks that are grossly undervalued around here, and many that are overvalued. Take SEMI, a short while ago they reported a great quarter ($.40) earnings, and are probably going to finish the year above my expectations (#msg-546439) of $.50/share, the same is true with HAUP (though, I don't expect great earnings any time soon). Stocks selling at discount to book, low PE (or potential PE), but without "following on the street". Their valuations will increase once money will start and seek uncommon value, not here and now (though SEMI is already a solid 25% bove the price when I posted that post), and of course, the gain is nothing compared to the multi baggers in the MOMO stocks. Longer term, though, for those seeking lower risk and steady valuation increases, orphan value stocks might not be such a bad idea.
Yes they do. As J. P. said, "The market will fluctuate". As Zeev pointed out, at any given time, there will be wide variations in relative valuations. Certainly, one can take advantage of those variations to capitalize on the fluctuations.
For the market as a whole, the reason I believe we are far from a valuation low can be seen on:
While we may not get to a P/E of 5.6 (in '32) or 6.6 (in '82), unless "THIS TIME IT IS DIFFERENT", we will get < 10. But as I mentioned before, it doesn't have to occur in one plunge.
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