Additionally, he asserted that the technology sector is at "one of the cheapest levels it's ever been relative to the rest of the market." A bold claim indeed, and one worth exploring to give merit to the argument that, despite the record highs of late, there are still pockets of value within the market.
While historical data on individual sectors is not easy to come by and the late-1990s Dot.com Boom and Bust as well as the 2008 Collapse of Lehman Brothers and subsequent financial crisis definitely skew the respective averages for technology and financial stocks, we have crunched simple year-end numbers for the 10 S&P sectors (as well as the broad S&P 500 Index) going back to 2002. Interestingly, the current P/E ratio on the broad-based S&P 500 is 16.8, right in line with the average over the past 11 years, suggesting that stocks in general are not significantly overvalued, especially when one considers the incredibly low interest rate climate that exists today.
Top 5 Casino Stocks To Watch Right Now
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That said, it is fascinating to see the relative attractiveness of tech stocks, which have often traded at a premium to the overall market due to their historically better-than-average growth potential. In fact, while the S&P 500 Information Technology Index trades at 17.1 times trailing-12-month earnings, that figure is just 72% of the 11-year average P/E, the largest current discount of any of the S&P sectors.
It is a similar story for the tech-centric NASDAQ 100, which presently trades at 21.1 times earnings, a multiple that is just 79% of the 11-year average of 26.8 for this growth-stock dominated index. Of course, the beauty of active portfolio management is that we do not have to buy the entire index as we can separate the undervalued wheat from the overvalued chaff.
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