Clown-Free Zone... sorry, no clowns allowed Message Board

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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: pater tenebrarum who wrote (89936)	4/4/2001 2:43:15 PM
From: Terry Whitman	Read Replies (3) of 436258

The market is always undervalued according to queen Abby Jo. She's going all out for the 2001 Irving Fisher award. Needs a couple more calls to beat out Joey B. hohoho. Yardeni FV calculator says we are in fact undervalued. I used a -5% earnings growth instead of their 0.8%, and get a smidgen overpriced. If you use -15%, as some have suggested may be the case, we are still 15% overpriced. >Over the next 12 months, the consensus earnings forecast of industry analysts for the S&P 500 is $57.44 per share, according to the latest weekly data compiled by I/B/E/S International. This is a .8% increase over the latest available four-quarter trailing sum of earnings. The fair-value of the S&P 500 Index was 1167.48 yesterday, derived simply as the 12-month forward earnings divided by the 10-year Treasury bond yield, which was 4.92% yesterday. The S&P 500 closed at 1106.4 yesterday, suggesting that the market was 5.2% underpriced, i.e., below the fair value. Using your estimated -5% growth in corporate earnings and your chosen 4.923% bond yield results in a fair value of 1099.17, suggesting that the stock market is .7% overpriced currently. < Top in on the Clownbuck??

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