Investors rethink stock valuations as China, growth weigh on prospects
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"Fewer stocks are leading the rally while more are hitting their lowest prices in a year, Thomson Reuters data show. For the year through July 17, just five companies – Apple, Amazon.com Inc (NASDAQ:AMZN), Google Inc (NASDAQ:GOOGL), Walt Disney Co, and Facebook Inc (NASDAQ:FB) – accounted for 61 percent of the year to date gain in the S&P 500, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices."
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"This 'buying the dip' mentality has been so successful in the last several years, I wonder if we've got to wash that out," said Jim Paulsen, who helps manage about $350 billion as chief investment officer at Wells Capital Management in Minneapolis.
"Maybe we go down 5 to 7 percent, people buy the dip and then it goes down another 5 percent and washes that out finally. I wouldn't be surprised if we get a 10-to-15 percent correction."
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"Fewer stocks are leading the rally while more are hitting their lowest prices in a year, Thomson Reuters data show. For the year through July 17, just five companies – Apple, Amazon.com Inc (NASDAQ:AMZN), Google Inc (NASDAQ:GOOGL), Walt Disney Co, and Facebook Inc (NASDAQ:FB) – accounted for 61 percent of the year to date gain in the S&P 500, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices."
...
"This 'buying the dip' mentality has been so successful in the last several years, I wonder if we've got to wash that out," said Jim Paulsen, who helps manage about $350 billion as chief investment officer at Wells Capital Management in Minneapolis.
"Maybe we go down 5 to 7 percent, people buy the dip and then it goes down another 5 percent and washes that out finally. I wouldn't be surprised if we get a 10-to-15 percent correction."
Hope is dangerous in this game.