Market Valuation Paradox: Healthy Small and Mid-cap Enterprises' Bear Market Valuations Coexist with Index Highs

some large companies have high valuations, yet they are not bubbled, while some small and medium-sized enterprises with sound fundamentals and good shareholder returns are trading at bear market valuations. At the same time, due to the rising proportion of passive investments, active managers, in order to keep up with the market's gains, have to increase their investments in companies with momentum, leading to a weakening of the ability to discover value.