13127. INVESTMENT THEORY AND STOCK MARKET VALUATION. A comprehensive overview of the current state of investment theory and stock market valuation, focusing on the issue of excess valuation in the 1992-1998 bull market, and the role of risk premiums and alternative investment modes in investor decisions. Contrasts fundamental theory (value and information based) with the technical theory of investment (based on past market movements and cyclical theories). The study concludes that while stock prices always return to the fundamental value of their underlying assets and returns, the market as a whole may be driven to ever-higher levels by a paradigm change in investor confidence, and by the lack of viable alternatives for placing surplus investment capital. 31 pages, 34 footnotes, 20 bibliographic sources.