VOLTAIRE'S PORCH-MODERATED Message Board

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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED

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To: Boplicity who wrote (26867)	12/21/2000 9:44:44 PM
From: FlameMe	Read Replies (1) of 65232

porch, i've enjoyed perusing this thread for a while. i wanted to point out a couple positives while realizing there is no reason to be bullish yet. 1. the model the fed uses for valuing stocks shows that stocks are less than 10% overvalued now after peaking at 75% overvalued. 1998 was the last time stocks were this "cheap" using this model, and it won't take much of a move down in the ten year bond yield to make stocks undervalued at these levels. 2. bond yields have fallen a lot. there will be a day when people will start focusing on these falling yields and they will want growth stocks. that day will come when investors start looking "across the valley" and anticipate the economic growth from rate cuts. low bond yields + economic growth equals p/e expansion and the best possible investing environment. hope everyone has a merry christmas! ross

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