Stocks may be coming off their worst week in about two months, but Bryn Mawr Trust's Jeffrey Mills warns there are few bargains.
He believes Wall Street isn't accurately pricing in pain of the economic shutdowns.
"We don't love the risk-reward right now in the stock market," the firm's chief investment officer told CNBCs "Trading Nation" on Friday. "We did use the rally above 2,800 [on the S&P 500] to lighten up a little bit on equities."
It's a strategy he outlined on the show in late March. By mid-April, he was cutting his exposure, and it's a move he doesn't regret.
"The market is trading right now at about 20x forward earnings. I think that multiple is just a little bit high considering all the uncertainty out there," said Mills, who's also a CNBC contributor.
He's particularly concerned about the potential for massive bankruptcies associated with the coronavirus fallout — as well as the quality of the S&P 500's massive comeback off the March 23 low.
"Only 15%... in the S&P 500 is trading above its 200-day moving average. So, you've had a lot of investors crowd into a specific perceived area of safety in the market — large cap growth stocks," noted Mills. "Look at cyclicals. Look at small caps, banks, transports. All the areas that might indicate a more durable recovery in the economy. They're all stuck below 2018 lows."
Plus, Mills suggests it's hard to firmly rely on Street estimates. According to Mills, earnings and economic estimates could be all over the map because the unprecedented shutdowns are putting forecasters in uncharted territory.
"To predict exactly where the data is going to come in relative to expectations, it's just really, really difficult," he said. "We are inventing new charts to even capture some of the data we're seeing."
He doesn't expect to put new money to work in stocks until the markets stabilize.
"When people ask me, 'How should I be invested? I need this money in one or even two years' time.' I tell them they probably shouldn't even be in the stock market at all," said Mills, who added the advice applies more than ever.
For now, he's partial to having more cash than usual on the sidelines. He's also looking to the bond market.
"There's still opportunity in areas like investment grade credit. Credit spreads are still pretty wide," Mills said. "They're at levels that we saw in 2015-2016, when there were issues with oil."