We are in an interesting phase of the stock market cycle.

The monetary and valuation models flash yellow and red, while momentum and sentiment are bright green. And the Federal Reserve has raised rates at a faster pace than ever before, which is going to hurt stock prices eventually.

Interest rates are a vital component of every valuation model used by analysts, and investment bankers use interest rates as a key component. The higher interest rates climb, the less companies are worth.

Interest expense is also a major line item on many corporate balance sheets: higher interest expense leads to lower profits, another key component of valuation models. Lower profits lower the value of a company.

This is all true and will eventually be reflected in the level of the stock market—but the key word is “eventually.” Right now, no one cares about valuations and profits. The Fed might stop rising rates, and the last few economic reports are excellent. It is time to buy. It all up-up and away from here!

There will be a reality check at some point. There always is sooner or later.

Usually, it is later.

So, what do we do until there is a bargain creation event that allows us to buy stocks aggressively?

Obviously, the answer is to explore the dark corners of the market that no one else cares about. This is an excellent time to go hunting for those unloved, ignored, and deeply undervalued companies.

We want businesses trading for far less than the current value of their assets and cash flows—businesses that have the potential to increase their value over the next several years. These types of companies give us the potential for longshot returns regardless of what the markets do in the interim.

Gray Television Inc. (GTN), which owns TV stations, is an excellent example of a stock that can return several multiples of the current stock price.

No one cares about the stock right now, largely because no one cares about television stations. We want artificial intelligence and breakthrough drugs that will cure every disease known to man and make us gazillionaires by next Thursday. TV stations are passé. Everyone is cutting cords and going to streaming services.

Cool story, bro.

Traditional broadcast networks are still catching more eyeballs every day than any of the streaming services. According to a recent report from…

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