“Equities, as an asset class, are undervalued due, in part, to the misvaluation between equities and bonds,” said Paul Bagnoli, the Director of International Product Development at value manager Bernstein, when he spoke last week at the 2003 AXA Expo in Sydney about value investing and how investors can find opportunity in the equity market. Predicting that this so-called misvaluation between equities and bonds will result in a 9% return from the US equity market over the next year, he added “we can justify this modest prediction.”

“The excesses of the late 1990s got us to where we are today,” he said, adding that despite this, relative pricing of asset...