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Strategies & Market Trends : The New Economy and its Winners

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To: Bill Harmond who wrote (8629)	9/8/2001 12:44:36 AM
From: 16yearcycle	Read Replies (2) of 57684

The S&P is 8.5% higher than it was four years ago. Somehow I don't recall that folks in 97 were talking about how the market would be lucky to go sideways for the next 13 years, although there was talk about overvaluation. The feds own model shows that at in early 1999, the S&P was not overvalued. Seems that rates are lower now, and inflation is lower. Don't even ask about money supply growth. Some bubble. The "bubble" seems to have been from 12/98 to 4/00. The nasdaq is 500-600 points lower than what fair value was in late 1998. The pe on the entire market is now at 16....with no inflation, low rates, and damn close to trough earnings. The pe on the S&P in 74 was 7, but rates were at 10, and trailing e were at a peak. It is my opinion that we are currently about 15% undervalued across the board and I can't find a time when the market was more than 30% undervalued according to the fed model.

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