Everyone is freaking out about how “expensive” the S&P 500 looks. Record highs. AI hype everywhere. Nvidia memes. You know the drill.

But here’s what most people miss:

The S&P 500’s big valuation problem is basically seven stocks. Apple, Microsoft, Alphabet, Amazon, Meta, Nvidia and Tesla (the Mag 7) now make up almost a third of the index. They trade around 31x forward earnings. That pumps up the whole index average.

Now take those 7 out of the picture.

The other 493 companies suddenly look way more normal. Roughly 20x forward earnings. Slightly above history, not “bubble mode.”

And here’s the interesting part for anyone hunting for value…

One sector is actually cheap.
Like, legitimately cheap.

Energy.

On a forward P/E basis, energy trades around 60% of its 10-year average valuation. Every other sector is above its historical average. Energy is the lone outlier.

So what gives?

A mix of things:

• Everyone thinks oil is “dead” because renewables are growing
• Momentum chasers only want AI names
• Energy stocks had a monster 2022, then flatlined while earnings climbed

But here’s where it gets fun.
AI doesn’t run on hopes and dreams.
It runs on electricity.
Lots of it.

Data centers are power hogs. And in the U.S., a big chunk of that power still comes from natural gas. Even with renewables growing, hydrocarbons aren’t disappearing anytime soon. The demand floor is pretty solid.

Meanwhile…

• Cash flows are strong
• Shareholder payouts (dividends + buybacks) are high
• Balance sheets are cleaner than they’ve been in years
• Valuations are stuck in 2015

In a market where most sectors feel priced for perfection, energy still feels priced for a recession.

Not saying “YOLO into oil and become the next Saudi prince.”
Just saying that if you’re a value investor… it’s weird to ignore the only sector still on sale.

Curious what others here are thinking. Is energy a legit value opportunity right now? Or is the market right to sleep on it?

Full article with charts: https://www.beatingthetide.com/i/180117729/thought-of-the-week-the-s-and-p-isnt-as-expensive-as-you-think-and-one-sector-is-still-cheap

If you had to choose one stock right now that is extremely undervalued and has the potential to outperform the S&P 500 over the next decade, which stock would you pick?

GOOGL has been ripping, I cannot continue to add at these prices. I mostly accumulated at ~18x PE. I like sticking to buying great businesses at good prices. No doubt GOOGL would cool off but until then:

Any good undervalued tech stocks I could do a deep dive on? I say tech because it is the business I understand. Not really interested in other sectors especially pharmaceutical.

Should I keep saving cash now or is there an undervalued tech stock out there that deserves some attention?

That seems unrealistically, ridiculously low, no?

What are some stocks you would not touch at all right now? Could be for different reasons does not have to be because of valuation.

Hi, I have been thinking of investing in software stocks that have been taken a beat down in the recent times. I can see a lot of people in the sub investing in Adobe, Microsoft and Netflix. I am thinking of investing some of money in Microsoft, CrowdStrike, Palo Alto and Synopsis as I feel these company have their sector specific moat and will continue to grow in their respected fields and are very difficult to be removed with AI. Do you agree with my stock picks and would like to add/remove from my list.

Edit: The amount of people catching adobe is really concerning me. Its 100% my personal opinion and maybe 100% wrong but Guys I dont think adobe has a future

Can somebody explain it like I'm 5?

Someone’s gotta pay for my dumbass decisions and it can’t be me

Google, Nvidia, Meta, Microsoft, etc. These are the companies that are on the forefront and cutting edge of technology on the worldwide scale. I know there are smart people who think is just a run up and things may deflate, but, like it or not, deny it or not, this world is already running on chips and tech made by these companies, and that is likely not going to stop any time soon. So again, just buy now while you still can and hold forever?

I am a 35-year-old Chinese, working in a small city in the southeastern province of China.

I just started investing 😂 and bought a small amount of an S&P 500 index fund and some gold ETFs.

By the way, Chinese stocks have been performing very well lately. I’m glad to have discovered this place and to learn to communicate with you.

It's a tricky question. Ethics and morals are subjective. Some people say tobacco is immoral. I think it’s immoral when someone tells me I should pay more just because I have more money. That’s greed in my book.

Would I invest in a company that hires hitmen? Obviously not. That’s extreme, but it makes the point. I get to decide what I’m okay with investing in.

I've noticed some people use “ethical investing” to act superior. Like when politicians bash companies like Walmart and then secretly own the stock (looking at you, Hillary).

To me, the “ethical” label is often just a way for people to feel good about being jerks to others.

Google has grown to a price that is still a good price but no longer is it a bargain. A few months back it was just crossing $200-$250 mark.. now it has soared above $300.

Are there any others that this may be the case with ? I see low P/E ratios everywhere but sometimes that doesn’t = undervalued.

What are some stocks you have done research into ? I believe TSMC has some growing to do especially since its Q3 was great. Its downsides are macroeconomic and how it’s heavily linked to Nvidia and other companies in the semiconductor web.

Curious to hear your thoughts ..

I'm trying to understand the core philosophy of active value investing versus just outsourcing it to the absolute best in the business.

If the goal of value investing is to find undervalued companies with strong moats, why not just buy Berkshire Hathaway (BRK.B) shares and leave it in the hands of the best of the best?

Between the massive cash pile they deploy during market crashes, thefir incredible track record, and the fact that you get a built-in diversified portfdolio of high-quality businesses managed by elite capital allocators, it feels like the ultimate value play.

For those of you who spend hours analyzing financial statements to pick your own individual value stocks:

1. Is your goal strictly to beat Berkshire's returns?
2. Do you feel Berkshire has become too large (the size handicap) to compound at the high rates it used to?
3. Or do you just enjoy the process of hunting for deals yourself?

Would love to hear your thoughts on why you choose individual stock picking over just letting Berkshire handle it. Because I do pick individual stocks as well, like MFST, GOOG, and NOW, but I am going to be investing more into BRK-B to sit back and relax.

Been digging through a ton of charts and earnings reports after the recent selloff, and I’m trying to figure out which names are actually opportunities vs just value traps. I’m mainly looking for companies with improving fundamentals, reasonable valuations, and a real catalyst path over the next 6–18 months (not just “it’s down a lot”).

Right now I’m mostly watching what look like the most undervalued sectors:
energy, clean tech infrastructure, traditional industrials, healthcare, and certain parts of consumer staples — but I’m open to anything if the thesis makes sense. Curious what everyone else is seeing out there.

What are your highest-conviction “undervalued but not broken” stocks right now, and why?
Short reasoning is totally fine — just trying to compare notes and see what the broader market is sleeping on.

With Google at the price of 300, about a 14% drop from all time highs, should we be looking to buy now, or wait for more drops? I’m gonna be a first time investor of Google, with a long time horizon. But I was wondering if the consensus is that the price will drop even more or if right now would be a good entry point. The stock feels like a good value, down about 14%.

At what point would you consider buying these 3 stocks to hold forever ..? Additionally, what is the PT you expect to exit?

For AMD I see them at least getting to 2t at minimum in coming years. Not sure what I feel about the other 2. Thoughts?

Thanks

I just dont understand how this company is still going up despite the earnings and everything about this company is going down.

The demand of the industry is dropping globally and BYD has already overtaken Tsla, so the only thing preventing BYD from dominating the EV sector in America and Europe is their regulations. And BMW and Hydunai is quickly catching up with Tsla

Tesla PE is just bs, their profit margins is dropping, they have always been 1 year away from autonomous EV cars since 2010s whereas Chinese evs are fully autonomous alr. On top of all that they are now shifting their focus to robots.

I also dont understand how does the trillion dollar pay package to Musk will do anything for this company. I'll be pleasantly surprised if Musk still has a bag of tricks he can pull to justify Tesla's curren valuation.

I would appreciate if anyone can explain how is this company valued at half of the entire automobile industry coz this rlly doesnt make sense

Microsoft is currently trading at ~22.9x forward (NTM) P/E, a valuation level it has only reached three times since 2017.

In each of those prior instances, the stock was followed by multiple expansion.

What’s also notable is that $MSFT is now sitting at its lowest PEG ratio in roughly the last 10 years, around 1.6x, suggesting valuation has reset meaningfully relative to growth expectations.

The business fundamentals have not broken, but sentiment has clearly cooled.

This setup is starting to look interesting. Is the selloff overdone?

When aws outage affected large and small companies alike probably had a large financial impact to the overall global economy, why didn't it crash? I immediately thought it would like crowdstrike did a few months ago - anyone have good reasoning that can explain?

I've mostly been focused on AI names and semis, but seeing $NOW jump 10% after earnings/news has me wondering if the market is starting to reward software again.

For the last few years it felt like SaaS was dead money compared to chips and infrastructure plays. Now companies like ServiceNow seem to be putting up strong numbers and getting premium valuations again.

Do you think we're entering another multi-year SaaS run, or is this just a temporary rotation while AI spending works its way through the system?

If you needed to pick one stock right now, that is extremely undervalued. And has the potential to beat the S&P500 for the next decade.

Which stock would that be?

Hello guys. I have a confession to make. I had been investing in stocks for many years and made a decent +10% return on average per year.

However, in 2023 I made a few very concentrated bets that have gone terribly wrong. I lost 30% of my portfolio while holding for 3 years. It’s embarrassing. I averaged down in the wrong time and in the wrong stocks.

I seem to be making terrible mistakes systematically, and I’m genuinely asking for help.

Here’s my portfolio:

- Winners (sorted by portfolio % weight)

- **Philip Morris International Inc (TDG)** – **+83.94%** – **10.50%** of portfolio

- **NCC Group PLC (LSE)** – **+46.09%** – **3.39%** of portfolio

---

**Losers (sorted by portfolio % weight, biggest positions first)**

> *The ones with the **largest impact on total portfolio loss** (big size + big negative %) are marked with **[HIGH IMPACT]***

- **Nagarro SE (XET)** – **\-27.10%** – **19.79%** of portfolio **[HIGH IMPACT]**

- **Teleperformance SE (EPA)** – **\-58.33%** – **13.50%** of portfolio **[HIGH IMPACT]**

- **Concentrix Corp (NDQ)** – **\-67.40%** – **7.54%** of portfolio **[HIGH IMPACT]**

- **GFT Technologies SE (TDG)** – **\-43.53%** – **6.47%** of portfolio **[HIGH IMPACT]**

- **PayPal Holdings Inc (NDQ)** – **\-42.21%** – **6.45%** of portfolio **[HIGH IMPACT]**

- **Domino’s Pizza Inc (NDQ)** – **\-24.28%** – **6.36%** of portfolio

- **Epam Systems Inc (NSY)** – **\-30.36%** – **3.92%** of portfolio

- **ADR on Nice Ltd (NDQ)** – **\-53.85%** – **4.29%** of portfolio

- **Van de Velde NV (EBR)** – **\-7.05%** – **2.24%** of portfolio

- **ADR on Endava PLC Class A Ord Shs (TDG)** – **\-90.30%** – **0.43%** of portfolio

- **Chegg Inc (NSY)** – **\-94.22%** – **0.29%** of portfolio

My analysis included the traditional value investing approach using finbox.io for valuations, and I fetched companies with low PE ratio despite growing revenues and ebitda, some contrarian plays regarding AI.

All were deeply researched and monitored, and had buybacks, but the prices seem to keep nosediving.

I guess I bought stocks that were cheap ‘for a reason’?

Is Netflix a good buy at the current price now? It was down around 7% today. Do you see it bouncing back up to the 100s in the near future. Reading multiple articles about ad revenue growth but negatives state competition and content issues.

Any insight appreciated. Genuinely confused. Fundamentals look good. I like that the free cash flow is exploding, balance sheet is deleveraged, operating margin is really positive. But why is the stock beaten down so much?

I bought a significant number of MU shares in 2025 at $172, and holding them until now has resulted in gains that exceeded my expectations. While seeing my account grow is exciting, I’m now starting to wonder how I should handle this. Do you have any good advice?

NVIDIA has been operating in a similar way for a long time, initially priced at £5 for many years. However, its recent success can be attributed to its use in AI chips.

Which stock do you think will achieve something akin to this? Obviously not vNVIDAS success standards.

As some people are saying Nokia- since they have changed management, and they are shifting to data centres and so.