You just need to be listening.

Utilities were the darlings of 2014. The group outperformed the DJIA, the S&P 500 and the Nasdaq Composite by wide margins. Most people own utility shares for "income" and refuse to trade out of them even when the shares get overpriced.

That can be a big mistake.

Typical utility shares were yielding around 3% near year end 2014. A 10% - 20% drop is equivalent to giving up as much as six years’ worth of dividend income. Worse still, those quarterly dividends are taxed in the calendar period they are received while any capital losses are deferred until shares are sold.

The S&P Utility Industry Group had a monster 2014. They finished with a flurry. The Dow Jones Utility Index (DJU) rose a whopping 3.56% in the week ended Dec. 26, 2014. It was up almost 30% plus dividends YTD at that time.

San Diego-based Sempra Energy (SRE) is a good proxy for understanding just how pricey the industry had become. Its year-end 2014 P/E was double where it sat from 2008 through 2011. The best buying opportunities during those years came at multiples of just 7.8x – 10.9x.

GuruFocus readers saw my article warning about utility overvaluation ... but probably ignored it. Why sell the very stocks that just finished such a smashing year?

Read More at: GuruFocus.