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Nir Kaissar and Barry Ritholtz

How to Know When Stocks Are Properly Valued: A Debate

Cheap stocks don't always play catch-up, and pricey stocks don't always disappoint.
Where would you rather be?

Where would you rather be?

Photographer: Michael Nagle/Bloomberg

With U.S. stocks reaching new records almost daily, there’s an endless discussion about whether equities are cheap or expensive. Bloomberg Gadfly columnist Nir Kaissar and Bloomberg View columnist Barry Ritholtz met online to debate the valuation question.

Kaissar: Everyone knows that U.S. stocks look expensive relative to the rest of the world. The Standard & Poor’s 500 Index has outpaced both the MSCI EAFE Index -- a collection of developed market stocks outside the U.S. -- and the MSCI Emerging Markets Index by 6 percentage points annually since March 2009, when the market hit bottom, through May, including dividends.