The market has been on the move forward this week, a little at a time. We’re due for a pullback- wouldn’t surprise me if it was pretty volatile. I find it very interesting that the U.S. dollar is at a multi-year low against the Euro with many unkowns in the economy right now, and yet the market still moves forward. I’m certainly not complaining, but I’m not sure that the “rising tide” is “lifting all boats” this time. Morningstar recently put out an article describing the market as close to fairly valued, with the DOW undervalued by almost 7%. Essentially the view indicates investor expectations for “modest returns this year.” I was surprised by that analysis because the market just seems overvalued to me after a pretty good run since late summer of ‘06.  How do they do it? From the Morningstar article, “We can compute an aggregate fair value for the market by calculating a market-cap-weighted average of our fair value estimates for the stocks in an index. To determine if the market is over- or undervalued, we then compare the indexes’ aggregate fair values to their current market prices.”  So it’s Morningstar’s analysis that provides the basis. I’ve always enjoyed their research, I don’t always agree with their views.  It’s going to take a lot more upside earnings numbers and strength in the economy before I see upside. But how about that eBay?! Pretty decent earnings… I just love a company that earns money through leveraging the passions of other people. Speaking of the passions of other people.. I’ve been waiting for a good entry point for Altria and this week may provide one. They just posted a first-quarter decline of 21% of net profits… although international growth is strong and their forecasts are positive. Should be an interesting week.
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