There's only one sector value investors can turn to in this pricey market

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I'm really sorry if you are like me, a so called value investor who likes to find cheap stocks that have temporary issues and are out of favor with the market. In the 9th year of a bull market they are getting really, really difficult to find.

Not only that, most market participants have gone full out in the opposite direction, buying the most expensive stocks and riding the momentum irrespective of valuation. I feel like investor road kill. Such extreme valuations in the U.S. on so many metrics have forced me to look overseas for value.

Luckily I started to a few years ago because emerging markets and Europe were littered with cheap stocks. I believe there is now less value in Europe after the strong run but for perspective, the Italian stock market is still more than 50 percent below its 2007 peak and Spain is about 30 percent below that 2007 high. I continue to like equities in Brazil, South Korea, and India and believe Asia is going to be where most of the world's growth will take place in coming decades.

But in the U.S., the value investor is on thin ice.

To quantify the extent of U.S. market valuations, one has to go back to the years 2000 and 1929 to see the view from up here. Market capitalization to gross domestic product, the Shiller P/E ratio, and the median price to sales ratio are just a few important metrics that have put the current marketplace in rarified air.

Should an investor keep on chasing overpriced equities and hope to get off the train at just the right time? Sit on the sidelines and fear missing out on further gains? Or sit on cash and pray for a large pullback that brings more attractive valuations? An all of the above type response may be needed.

Right now, the U.S. stock market appears immune to anything perceived as negative. The market rallied last Thursday on the good jobs number and rallied further Friday on the weak jobs number.

We loved quantitative easing and zero rates, and now we love no QE and rate hikes.

Tax reform is great but who cares when it happens. A persistent flattening of the U.S. yield curve doesn't matter and a steepening one says the economy is getting better.

I've officially thrown in the towel in trying to make sense of anything in U.S. stocks right now, but in the constant search for something washed out I do believe there is one area that has been left for dead: Agriculture and the fertilizer stocks.

Within that sector, notably Mosaic Co. and Potash Corp. come to mind. Corn, soybeans and wheat topped out in the summer of 2012 after the drought's in the Midwest and the crops every since have been robust. If there is one thing for sure, the global demand for food is in a non stop linear trend higher. The only issue for crop prices and the businesses within the industry is the supply side. While I can't tell you exactly when this equilibrium will right itself, there are signs we are close. If you want value, that's where to look.

Commentary by Peter Boockvar, the chief market analyst for the Lindsey Group and co-chief investment officer at Bookmark Advisors. Follow him on Twitter @pboockvar.

Disclosure: Peter Boockvar owns shares of Mosaic and Potash, and buys them for clients.

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