Bet against the masses. Don't be the lemming. Be fearful when others are greedy.

Follow these simple rules, and you'll probably be a successful investor.

With those rules of thumb in mind, you'd be forgiven for thinking now is a terrible time to buy stocks. The S&P 500 is up well over 50% since March, which is typically consistent with a market flooded with uncontrollable euphoria. Sure enough, many are preaching of an overvalued market that's gotten way ahead of itself.

Oh really?  
And maybe they're right. Sooner or later, they probably will be. But perspective is in order: When stocks bottomed out earlier this year, a better part of the investment community thought the world was about to explode. Companies like Citigroup (NYSE: C) and Bank of America (NYSE: BAC) traded for trivial valuations because they really, truly, were on the verge of death.

Today, it looks like we've skirted most of those calamitous end-of-the-world threats. It's still terrible, mind you, just not  as terrible as many thought. Naturally, stocks have sprung back to levels that reflect a deep recession, rather than a total Mad Maxscenario.

This is an incredibly important distinction to make: Markets haven't risen to levels that reflect exuberance, but to levels consistent with a world that isn't about to fall into mass insolvency.

This is evident by looking at the biggest winners over the past few months. By and large, the stocks that have risen the most are ones you wouldn't recommend to your worst enemy. Have a look:

Company

Return Since March

Dollar Thrifty Automotive

2,353%

Avis Budget Group

2,092%

Pier 1 Imports

2,227%

Are these companies destined for greatness? Did they announce a new blockbuster product? Are they the next  Google (Nasdaq: GOOG) or Apple (Nasdaq: AAPL), waiting to change the way we live? Goodness, no. Not even close. Their huge gains are simply a reflection that they'll live to see another day.

In general, this is a rally built on canceling out past pessimism. The biggest gains have been concentrated in very low-quality companies that are simply being given a second shot at life.  

Not all gains are created equal  
The idea that a stock is overvalued after a massive run-up is contingent on the idea that it was properly priced to being with. But this was hardly the case when the market bottomed in March. More importantly, some of the highest-quality companies in the world have largely been left out of the rally and  still trade at attractive prices.

Here are three in particular:

Company

Return Since March

Forward P/E Ratio

H&R Block (NYSE: HRB)

(1.3)%

12.0

Lockheed Martin (NYSE: LMT) Continued...