Ever since investors decided that the world wasn't going to end, stocks have soared. They've soared so much, in fact, that many now worry that we've come too far too fast. Should we be heeding Warren Buffett's advice to be fearful when others are greedy, and get out of stocks right now, before it's too late?

The case for panic
Anyone looking for a reason to be bearish on stocks doesn't have to search very hard to find plenty. Here are some of the big ones:

  • The sheer magnitude and swiftness of the stock market's move upward is enough to give you vertigo. In less than six months, the Dow is up 46%, while the S&P has risen well over 50%. Some international markets have posted even stronger gains so far this year.
  • Second-quarter earnings reports over the past month or so have given investors some relief, but using valuation measures like Robert Shiller's 10-year average earnings, stocks now have moved back to the expensive side -- despite still being well off their 2007 highs.
  • Much of the current enthusiasm stems not from a robust economic recovery but rather from early indications that the pace of the recession has slowed and may be close to bottoming. With future expectations now rising, though, anything short of a strong recovery may well disappoint optimistic investors.
  • While average investors are plowing more of their money into stocks, corporate insiders are selling at an extremely high rate.

Yet despite all these perfectly valid reasons for thinking that the stock market may be in jeopardy, you don't need to go out and sell your entire portfolio right now. Caution may be in order, but caution doesn't mean tossing your investing strategy to the wind at the first sign of potential trouble.

Crying wolf, again
The problem with trying to react to troubling news like this is that you can never be sure when the market might stumble from it. For months, bearish investors have seen this strong stock market bounce as a sucker's rally that would give them big profits when it finally ended -- yet stocks have not only held their ground but also added to their gains in the process. Signs of possible short-squeezes have recently appeared in many stocks once thought -- and in some cases, still thought -- to be doomed, such as AIG (NYSE:AIG), Fannie Mae (NYSE:FNM), and Freddie Mac (NYSE:FRE). Regardless of your long-term opinion on where these stocks and others like them will go, those who've bet against them are getting burned.

That isn't to say that the concerns that bearish investors have aren't valid or that they won't eventually lead to a market correction. When that correction will happen, though, is impossible to predict. And that's why trying to make short-term predictions about market behavior is virtually doomed to fail.

How to be greedy
If you're concerned about how much stocks have risen, here's one idea to consider: look at the stocks that the market has left behind. Even during one of the most greed-ridden episodes in market history, investors are still afraid of many stocks, such as the following:

Stock

6-Month Return

Newmont Mining (NYSE:NEM)

0%

Valero Energy (NYSE:VLO)

(0.4%)

Genzyme

(8.9%)

Apollo Group (NASDAQ:APOL)

(6.8%)

Abbott Laboratories (NYSE:ABT)

(1.2%)

Source: Yahoo! Finance.

Are these stocks all worth buying now? Not necessarily. Stocks that can't rise during a big rally usually have good reasons for getting left out. But they're more likely to be worth the time researching than stocks that have already soared five- or 10-fold over the past six months.

Ignore the hype
More importantly, stocks like those above aren't making the recent headlines. For an enterprising investor looking for good value, that's the best news you can possibly have. While others bid shares of hot stocks up to the stratosphere, you can still find opportunities to get in on the next big thing before it happens.

So be fearful of the rally and the impact it has had on high-flying stocks. But don't abandon the market. Instead, look for the values that investors have missed. Eventually, the rest of the investing world will discover them -- and that's when you can be truly greedy.

What stocks are you feeling fearful or greedy about lately? Let us know in the comment box below!

Cheap stocks are all around you, but do you know which ones will poison your portfolio? Learn how Richard Gibbons sorts out the gems from the junk.

Fool contributor Dan Caplinger tries to stay right in the middle of the fear/greed continuum. He doesn't own shares of the companies mentioned. Try any of our Foolish newsletters today, free for 30 days. The Fool's disclosure policy was afraid of spiders until an ETF got named after them.