Motley Fool Urges Quality Stocks as S&P 500 CAPE Hits 41 and Buffett Indicator Reaches 234%
Updated
Updated · The Motley Fool · Jul 1
Motley Fool Urges Quality Stocks as S&P 500 CAPE Hits 41 and Buffett Indicator Reaches 234%
2 articles · Updated · The Motley Fool · Jul 1
Summary
Shiller CAPE above 41 and the Buffett indicator near 234% prompted Motley Fool to tell investors to favor fundamentally strong stocks and hold them for years rather than try to time a downturn.
The advice comes as markets wobble, with the S&P 500 down nearly 3% and the Nasdaq off about 6% over the past month, while valuation gauges sit near dot-com-era extremes.
Motley Fool argues high prices alone do not make a company durable, urging investors to review portfolios now and sell holdings whose valuations no longer match their business fundamentals.
Amazon’s nearly 95% drop in the dot-com bear market is cited as a case for patience: investors who held on eventually saw the stock deliver more than 4,000% total returns since 1999.
The broader message is that even if a bear market or recession hits, companies with solid business models, profitability, leadership and industry strength are best positioned to survive and compound over time.