If you look at the Shiller price-to-earnings ratio for the S&P 500, you’ll find that the stock market is presently at its third most expensive in history. The most overvalued stock market was in 1999-2000 during the dot-com bubble. Second in line is the market just prior to the 1929 crash. At present, the market is just a hair below that level, with a Shiller P/E Ratio of 29.45.
In order to believe that stocks are going to maintain their current prices, you have to believe that S&P 500 earnings are going to rise about 30% this year. Not going to happen.
So if you are looking for momentum stocks to sell short, especially ones that don’t have the fundamentals to support them, look at these seven companies that are most likely to get crushed in the next market crash.
These are the kinds of stocks that I might swing trade in my stock advisory newsletter, The Liberty Portfolio, but I’d never hold them as an investment.