Q. Speaking of overpriced stocks, what is your opinion of Internet shares?

They are being financed by fast-growing cash flows and forgiving capital markets, not overpriced stock.

The other stock indexes are bound to drop eventually, these analysts say, because of overpriced and under-yielding stocks.

"Not that it's an overpriced stock, just that it is a fairly priced stock," he said.

In other words, the stock market's rise was fueled by such a powerful force that it was preventing many overpriced stocks from going down.

This adjustment process does not even require that sellers own shares of the overpriced stock.

Will the overpriced stocks of otherwise great companies come within reach?

Then they sell the overpriced stock to day traders.

An investment manager might implement this analysis by buying the underpriced stocks, selling the overpriced stocks, or both.

Institutions holding overpriced stock bought several years ago are likely sellers as the market rises, he said.