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Excerpt from fund manager John Hussman’s weekly essay on the US market:

If we examine median price/earnings ratios of different groups in the S&P 500 at the 2000 market peak and at current levels, we observe the following pattern:


Notice that in 2000, valuation multiples were highest for the largest stocks and lowest for the smallest stocks. The situation is exactly reversed at present, with valuations monotonically increasing as we move from the largest stocks to the smallest. Clearly, we've experienced a major shift in relative valuations in recent years, with smaller stocks moving to substantially richer valuations.

It's important to emphasize that I don't view any of these groups as “undervalued

Source: John Hussman on Relative Valuation Shifts