Stocks may not be cheap, says star money Mario Gabelli, CEO of Gamco Investors. Indeed, there's "no margin of safety" for buyers, he told
CNBC.
"But they aren't overpriced." And 1,900 for the S&P 500 index represents "a reasonable place to pick your place and start buying stocks," he said.
"Mr. Market goes up and down all the time. That's not bad."
The S&P 500 had a price-earnings ratio of 17.8 Friday, compared with 18.32 a year ago, according to Birinyi Associates. The index fell 10 percent from its record high of Sept. 19 to its Oct. 15 low, but it has since rebounded 6 percent.
Investors have focused on third-quarter earnings reports since the beginning of the month. The numbers have been "pretty decent" so far, Gabelli noted.
Approximately 77 percent of S&P 500 companies that have reported earnings thus far topped analysts' forecasts, with 60 percent beating revenue estimates, according to Bloomberg.
Other investors share Gabelli's cautious optimism for stocks.
"The S&P 500 has had a very sharp rebound, which has taken out most of last week's dip," Peter Dixon, a global equities economist at Commerzbank, told
Bloomberg.
"Europe is at the forefront of everyone's thinking. Markets had taken the downward trend in [Europe's] economy over the past few months and extrapolated it [to the U.S.] The fact that some data haven't followed that trend seems to indicate that markets were too gloomy."
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